Fraud found in 10% of real estate loan apps

As real estate loan fraud skyrockets, representing several hundred billion dollars of the annual U.S. housing market, there are a number of ways to recognize and prevent fraudulent activities, a government report said. Educating employees on common mortgage fraud schemes and implementing monitoring systems are two ways financial institutions can help curb mortgage fraud, according to a white paper from the Federal Financial Institutions Council. The paper said that up to 10 percent of all mortgage loan applications in the $3 trillion annual U.S. residential real estate market involve some form of material misrepresentation. 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 the FBI released in May. States are taking action to counter this trend, with Georgia's new Residential Mortgage Fraud Act signed into law May 5 by Georgia Gov. Sonny Perdue. The white ...