Industry News

Mortgage fraud climbs 30%

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

With an industry database showing a 30 percent increase in loans involving suspected mortgage fraud in 2006, the Mortgage Banker's Association is asking Congress to set aside $31.25 million over five years to hire more FBI investigators and prosecutors. In its annual mortgage fraud report, the Mortgage Asset Research Institute (MARI) said the sharp increase in mortgage fraud is partially because lenders are finding more cases of fraud in loans originated in 2006. But the slowdown in the housing market has also helped reveal fraud cases previously masked by strong price appreciation. After a loan is approved, it's unlikely to be reported as fraudulent as long as borrowers continue making payments. But a slowdown in home-price appreciation has fueled delinquencies and defaults nationwide, as borrowers find themselves unable to refinance loans with balances that approach or exceed the value of their homes. Once a loan becomes delinquent, a lender may discover that it was made under false...