Government figures indicate that reports of mortgage fraud rose to their highest levels on record last year, according to an article by Robbie Whelan in today's edition of The Wall Street Journal.
The article said that the Financial Crimes Enforcement Network, a Treasury agency, reported 70,472 "suspicious activity reports" related to suspected mortgage fraud, up from 67,507 in 2009, or a five percent increase. The number was the highest since the government began tracking in 1996, the article said, adding that "at the height of the housing boom in 2006, more than 37,000 frauds reports were recorded.
"Fraud artists are refining their schemes to take advantage of market distress," a report issued Monday by the Lexis-Nexis Mortgage Asset Research Institute. Some real-estate brokers in a scheme known as house 'flopping' target homes that are underwater - meaning their owners owe more than the market value of the house- and obtain artificially low valuations on them, the report said. Then, it continued, "using those valuations, the brokers persuade the mortgage lender to agree to a short-sale, in which it sells a home for less than the loan. The buyer, in turn, quickly sells the home at market value, profiting, along with the broker, from the difference in sales prices."
The article said that the Financial Crimes Enforcement Network, a Treasury agency, reported 70,472 "suspicious activity reports" related to suspected mortgage fraud, up from 67,507 in 2009, or a five percent increase. The number was the highest since the government began tracking in 1996, the article said, adding that "at the height of the housing boom in 2006, more than 37,000 frauds reports were recorded.
"Fraud artists are refining their schemes to take advantage of market distress," a report issued Monday by the Lexis-Nexis Mortgage Asset Research Institute. Some real-estate brokers in a scheme known as house 'flopping' target homes that are underwater - meaning their owners owe more than the market value of the house- and obtain artificially low valuations on them, the report said. Then, it continued, "using those valuations, the brokers persuade the mortgage lender to agree to a short-sale, in which it sells a home for less than the loan. The buyer, in turn, quickly sells the home at market value, profiting, along with the broker, from the difference in sales prices."
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
6sqft delivers the latest on real estate, architecture, and design, straight from New York City.
