- Mortgage fraud risk jumped more than 12 percent year over year at the end of the second quarter, according to CoreLogic. One in every 109 mortgage applications is estimated to have indications of fraud.
- Loan applications for real estate purchases are more likely to have fraud than for refinancing, and that may be part of the reason for the increase in overall fraud risk.
- Some borrowers are therefore juicing their incomes in order to qualify. How? The internet is making it a lot easier.
I don’t know about you, but this kind of information scares me back into 2007! Wasn’t the housing bubble bust that destroyed so many families based on a bag full of mortgage lies weighted down by greed of large corporations? Take a look here for the top 25 Greed monsters. (Subprime lenders) It seems that we are facing upticks in mortgage fraud again. Here are some quotes from an article I read:
“Loan applications for real estate purchases are more likely to have fraud than for refinancing, and that may be part of the reason for the increase in overall fraud risk. Because of higher interest rates, refinancing activity has slowed, so the share of purchase applications is higher.”
“A casual search will result in any number of online services that will not only generate fake pay stubs but will also answer phone calls and “confirm” income verbally, all for a fee.”
“There are sites where you can buy credit lines to increase your credit.”
“The areas with the highest rate of fraud risk are New York, New Jersey, Florida, Washington, D.C., and New Mexico. California, which has some of the priciest housing markets in the nation, ranked ninth, according to CoreLogic.”
“The survey also found a far higher risk for fraud in loans coming from wholesale lenders or brokers — which don’t fund the loans but instead gather a borrower’s information and shop it to lenders. That implies brokers are also committing fraud. This was common during the last housing boom, when mortgage fraud helped bring about one of the worst financial crises in U.S. history.”
This article “Mortgage fraud is getting worse as more people lie about their income to qualify for loans” is full of links to give you a better understanding of what’s going on.
If you are like me and lived through the bubble bust a decade ago, you are going to feel an irritation going down your spine. It’s called memories.
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Enjoy The Day! ~Valerie