Industry News

‘Occupancy fraud’ infects real estate

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Occupancy fraud was the most common type of mortgage fraud reported during the first half of 2005, according to statistics released by a fraud insurance company last week. More than half – about 53 percent – of claims filed with the Novato, Calif.-based The Prieston Group contained some type of occupancy misrepresentation, the company said. "Occupancy fraud" occurs when borrowers – or someone acting on behalf of borrowers – misrepresents whether they plan to live at the property, the company, which helps lenders protect themselves against mortgage fraud, said. Mortgage fraud is on the upswing, with the number of suspicious activity reports to the Federal Bureau of Investigation in 2004 almost triple those in 2003, according to a report by the FBI released in May. States are taking action to counter this trend, with Georgia's new Residential Mortgage Fraud Act having been signed into law May 5 by Georgia Gov. Sonny Perdue. The Act defines the criminal offen...