Unfortunately, mortgage fraud is not a thing of the past. It still occurs, although ethical lenders are going to great pains to make sure they’re not participating in the problem.
Inman News, a Real Estate industry news source, today reported the top 20 Metro areas for Mortgage Fraud activity. There was a 31% increase in reported cases during the first quarter of 2011 as compared to the same period in 2010, although the release did specify that many reports were on loans originated years ago.
It also states that 6 of the 10 top metro areas identified are in California, and that the majority of reports revolve around loans from 2006 and 2007. Many of the cases involved misrepresentation of purchaser income and instances of property ‘flopping’. Flopping is the practice of selling a home (usually a short sale property) at less than market price (most often to a ‘friendly’ party), who then re-sells it at the actual market value for profits that have ranged from 15%-300%.
Lenders and the Financial Crimes Enforcement Network (FinCEN-a division of the U.S. Department of Treasury) are conducting reviews on poorly performing loans. A listing of the top 20 areas for mortgage fraud in the report are listed below:
Top 20 metros for mortgage fraud
1. San Jose-Sunnyvale-Santa Clara, Calif.
2. San Francisco-Oakland-Fremont, Calif.
3. Lost Angeles-Long Beach-Santa Ana, Calif.
4. Riverside-San Bernardino-Ontario, Calif.
5. Sacramento-Arden-Arcade-Roseville, Calif.
6. Miami-Fort Lauderdale-Pompano Beach, Fla.
7. San Diego-Carlsbad-San Marcos, Calif.
8. Las Vegas-Paradise, Nev.
9. Atlanta-Sandy Springs-Marietta, Ga.
10. Salt Lake City, Utah
11. Chicago-Naperville-Joliet, Ill.
12. Washington, D.C.-Arlington-Alexandria, Va.-Md.-W.Va.
13. Tampa-St. Petersburg-Clearwater, Fla.
14. New York-Northern N.J.-Long Island, N.Y.-N.J.-Pa.
15. Orlando-Kissimmee, Fla.
16. St. Louis, Mo.-Ill.
17. Seattle-Tacoma-Bellevue, Wash.
18. Phoenix-Mesa-Scottsdale, Ariz.
19. Richmond, Va.
20. Denver-Aurora-Broomfield, Colo.
1 comment:
Be sure your Realtor talks with your loan officer prior to putting an offer on a house. You want to make sure that enough seller concessions are negotiated to cover all your closing costs so that you don’t have to pay anything more than your down payment.
Salt Lake City Realtor
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