Industry News

Reports: Real estate loan fraud getting worse

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Mortgage fraud, described as an "epidemic" by the FBI, is intensifying in the United States, according to reports released this month by two key mortgage industry sources. The number of mortgage-related suspicious activity reports to the federal Financial Crimes Enforcement Network in the first half of 2005 was 33 percent higher than in the first six months of 2004, according to a report issued on behalf of the Mortgage Bankers Association by the Mortgage Asset Research Institute (MARI). (Read Inman News' 18-page white paper, "Inside Real Estate's Fraud Crisis.") "It's getting worse," said Mark Fleming, chief economist at CoreLogic, a provider of fraud prevention technology that publishes the quarterly Core Mortgage Risk Monitor. Collateral risk rose by 6.4 percent between the fourth quarter of 2005 and the first quarter of 2006, according to the CoreLogic report. Residential real estate loan fraud is a national epidemic, costing communities nationwide an estimated $1 billion in 200...