The FBI has Northern Virginia in its sights. With the continued news on the issues surrounding sub-prime mortgages Northern Virginia is one of the areas that the FBI is taking a look at more closely. The 2006 Mortgage Fraud Report named Virginia as one of the top areas of suspicious activity. Since Northern Virginia has been cited as a potential area of concern a special task force is being established to review documents at a number of local mortgage companies.
It isn’t hard to look through the MLS and find agents purchasing multiple properties either themselves or with a partner. Then to find those properties “flipped” within a month for significant increase in price. It also isn’t hard to find that some of those same agents also had a mortgage company that they owned or had a stake in as well. The FBI will be closely looking at these relationships to determine if the homes were financed at an inflated value through these affiliated relationships.
The 2006 Mortgage Fraud report also pointed at that there was “a strong relationship between mortgage fraud and loans in foreclosure.” There are neighborhoods throughout Northern Virginia where you can see victims of this practice. They are easy to find. All you have to do is drive up and down the streets and see the McMansions half finished with a Foreclosure sign out front or others where the grass is a foot high at house after house to know where they will look first.
This is just yet another chapter in what will continue to be a long road to correction in the housing industry. First the mortgage industry and now agents need to make sure that they weren’t involved deals that may lead the FBI to your door. The punishments will likely be harsh considering the overall impact these practices have had on the real estate market.
WASHINGTON POST ARTICLE ON DECEMBER 18, 2007.
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