Mortgage fraud losses in Michigan jumped from nearly $9 million to $26 million over a two-year period in what has become one of the fastest-growing white-collar crimes in the nation, the Detroit News reported Tuesday.
“These criminals are literally trying to steal the homes out from underneath unsuspecting citizens,” Oakland County Clerk Ruth Johnson told the News. The county clerk formed a task force last month with police and prosecutors to combat the problem, reports said.
Nationally, the Federal Bureau of Investigation reports that mortgage fraud losses jumped from $429 million in 2004 to $1 billion in 2005. The FBI identified Michigan as one of the top 10 “hot spots” in 2005 for mortgage and deed fraud.
Mortgage fraud affects lending institutions and ultimately the health of the U.S. economy, as well as thousands of homeowners. Consumers pay through increased interest rates and fees at banks. In addition, values of other real estate in a neighborhood can be skewed by the artificially inflated prices claimed by scammers.
“It messes up the appraisal process for the entire neighborhood and the true value in that neighborhood,” John Gillies, assistant special agent in charge of the financial crimes unit for the Detroit office of the FBI, told the News.
In January, the Oakland County Clerk’s Office installed two security cameras in its register of deeds office to thwart mortgage and deed fraud in that county, where just a handful of new cases under investigation in recent months has added up to potential fraud of $500,000, reports said.
Oakland County’s Johnson said the cameras will help police and prosecutors nab and convict con artists, the News reported. In one case, Johnson told the News a mentally ill woman from Bloomfield Hills was in and out of the hospital last year when thieves literally stole her paid-off home via public documents and a fraudulent deed.
“She doesn’t have possession of the house so she may lose it and get bad credit all at the same time because there is a mortgage taken out on it for $278,000,” Johnson, a former state representative, told the News. “That is how these people do business: They look for those that are vulnerable and those they can hit. That’s the heartache for everybody and the homeowner.”
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