Mortgage Fraud in 2007 up by 42%
Last year, there was a 42 percent increase in mortgage frauds reported by banks. The said frauds were discovered when banks decided to become cautious in approving mortgage applications. In 2006, there was a recorded 37,313 mortgage fraud reports.
Based on the reports filed by financial institutions and banks, the most common mortgage frauds involved:
- Misrepresentation of assets or income
- Misrepresentation of borrower’s intention of becoming a primary resident
- Inflated appraisals
- Forged documents
According to the US Treasury, banks and financial institutions have now become adept in discovering and reporting fraudulent activities. Mortgage brokers were even singled out for initiating these frauds since they were the ones that submit the application and failed to confirm the information submitted to them.
It was also noted that there were significant increase in the incidence of “cash out” refinancing tied to fraud reports, where equities were pulled out by borrowers.
Last month, the Mortgage Asset Research Institute reported that Florida posted the most mortgage frauds for 2007, followed by the states of Nevada, California, Michigan, Georgia and Utah. It was the second year for the state.
In line with this, the Mortgage Bankers Association also called for over $31 million in funding for the following five years for the Justice Department and the FBI. The fund will be used to pay for new prosecutors and investigators that will be responsible in fighting mortgage frauds.
When applying for mortgages, you should make sure that all your documents are in order. All information should be accurate and correct. It is very important that you be honest and upfront in order for your application to get approved quickly.
There are actually brokers you can rely on to help you when it comes to getting approved for loans. In this regard, you should be wary of individuals who make too-good-to-be-true offers. When it comes to foreclosure news and buying tips, you can depend on Foreclosure Listings Nationwide.
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