2005 Mortgage Fraud $1 Billion – Mortgage fraud news from MortgageDaily.com
DALLAS, October 2 /PRNewswire/ Mortgage fraud reached $1 billion during 2005, according to government data provided to MortgageDaily.com, the dominant source of online news for the mortgage industry.
A report due to be released from the Federal Bureau of Investigation in the next “couple of weeks” will show mortgage fraud losses totaled $1 billion last year, an FBI spokesman told MortgageDaily.com. During the first half of 2006, fraud losses were $546 million.
Through Sept. 26 of this year, 2,293 Suspicious Activity Reports were filed in Los Angeles — more than any other city, the FBI reported.
But it was Detroit that was most at risk of mortgage fraud causing economic impact, according to the Core Mortgage Risk Monitor.
The index, which forecasts geographic “hot spots” most likely to be hurt by increased fraud over the next 12 – 18 months, was 6 percent higher during the first quarter a national basis.
A massive real estate finance fraud scheme was outlined in an Indiana lawsuit filed by Countrywide Home Loans.
The loans, made to unsuspecting buyers in Virginia and North Carolina, totaled more than $15 million, according to a copy of the complaint provided to MortgageDaily.com by Countrywide. The alleged perpetrators used a scheme to entice borrowers to join investment clubs which were nothing more than the fronts for a complex property flipping and mortgage fraud ring.
The Calabasas, Calif.-based company said the unknowing investors were recruited through church groups and other means.
Another recent fraud case involved a Massachusetts branch manager for Diamond Mortgage who falsified loan documents and paid fees to unlicensed originators.
During a June 20 on-site inspection conducted at the company, investigators found misstated income on loan applications from its Lawrence, Mass., branch.
Diamond’s owner told MortgageDaily.com in a phone interview that he discovered the former branch manager had not only allowed borrower income to be misstated, but he was also paying others outside of the company to originate loans without the company’s knowledge.
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