FBI: Mortgage Fraud Is Rampant in U.S.

[Rose Siding]

WASHINGTON -- Fraud is running rampant in the nation's mortgage industry, with nearly three times as many reports of suspicious activity so far this year compared with 2001, a top FBI official said Friday.

"It has the potential to be an epidemic," said Chris Swecker, FBI assistant director for criminal investigations.

Through the first nine months of 2004, mortgage companies and banks have reported more than 12,100 instances of suspicious activity compared with only 4,220 in 2001. The FBI currently has 533 pending mortgage fraud investigations, compared with 102 in 2001.

Law enforcement officials say the lending and refinancing boom that accompanied record low interest rates in the past few years is a key reason for the increased fraud. The FBI has identified several "hot spots" around the country where fraud is especially prevalent, including Florida, California, Nevada, Michigan, Missouri and Illinois.
...
Mortgage fraud is one of several financial crimes that the FBI has been targeting for extra attention in recent months. This effort, which involves 47 FBI field offices, has resulted in more than 151 charges since August in cases with potential losses to banks and other businesses of an estimated $3 billion.

http://www.newsday.com/news/politics/wire/sns-ap-fbi-mortgage-fraud,0,4429280.story?coll=sns-ap-politics-headlines

[izzie]

1. What is going on? I hear of people with morg. full value of home and-----

not a cent put down to buy the home. I know I do not own a home any more but this is new to me. It looks also like homes are very over value and this sounds like what happened in the saving and loan thing.It has to be bad business to morg. 100% of value if that home is way over valued. I pity the people when the bubble blows up in their face.

[demnan]

2. I have one of those mortgages

In fact they managed to put my credit card debt on the mortgage as well. But I'm glad they did. I would have never been able to buy a home without it.

I'm not worried about the bubble busting. Homes in my area are always going to be up.

[Art_from_Ark]

3. That's what they said about homes in Tokyo

until the bubble burst in the early '90s. Now the prices are often half of what they were at the peak.

Housing busts can happen anywhere, at any time.

[tom_paine]

4. Well, the fact that regulation is run by the defrauders now

probably has something to do with it.

Kind of like if the foxes are put in charge of Henland Security you can expect a similar rise in Fried Chicken Dinner Consumption.