A new mortgage fraud, beware
Date: April 21, 2005Source: JS Online
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America's booming mortgage industry has proven ripe for criminal pickings.
Cases of mortgage fraud are mounting.
The financial toll is reaching "tens of millions of dollars each year," though the actual damage is "unknown and probably unknowable," said William Matthews, vice president of Mortgage Asset Research Institute Inc., in an interview from his Reston, Va., headquarters.
Losses hit consumers, lenders, investors and neighborhoods in any combination, depending on the scam, said one industry expert.
As of September 2004, 533 FBI mortgage fraud investigations were under way, up from 202 in 2001, according to a Mortgage Bankers Association analysis released in January. The same report stated that, by last September, banks had reported 12,100 cases of suspicious financial activity to date in 2004, compared with 4,220 in all of 2001.
"We're seeing more incidents reported every year, and it's getting more egregious, in terms of losses," Matthews said.
Matthews, who is co-author of an annual mortgage fraud report to the Mortgage Bankers Association of America, sees the crime spree as tied to the market's heady growth - now nearly triple its $1 trillion size in 2000.
His reports don't calculate dollar losses, which he said victims are loathe to disclose, and complaint volume is kept confidential. Despite the private nature of his work, Matthews agreed to share his insights.
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