on Goodman- slow market conditions heat up mortgage fraud cases

BrokerIPTV: Today we are talking with John Goodman, real estate attorney. We appreciate you being here

Jon Goodman: Thanks for having me.

BrokerIPTV: One of the things I got to thinking about with current market conditions are you busier or not so busy?

Jon Goodman: We are busier, but the work isn't as fun as it used to be. There is lot of chaos out there and when there is chaos, people need lawyers. People sniping at each other more, but we are quite busy.

BrokerIPTV: All right, well this topic is about fraud and I want to know how big of a problem is mortgage fraud, I think I know the answer, but I would like to hear from you?

Jon Goodman: I think mortgage fraud is a big problem. Nobody knows how big a problem until we hit the bottom. Mortgage fraud doesnt tend to be detected until loans go into default and remains to be seen how many more mortgages will go into fault, but it is a big problem, it is very easy to guess that somewhere around 5%, say a residential mortgages are tainted by mortgage fraud.

BrokerIPTV: And because of the current market conditions, have we seen more which fraud go like this?

Jon Goodman: We have seen the revelation of mortgage fraud escalate, yes. In August of 2007, the lending industry had an awakening and had really cracked down and so I don't think there is a lot of new mortgage fraud going on in the system, but there is lots of mortgage fraud being reviled.

BrokerIPTV: About types?

Jon Goodman: There are lots of different types of mortgage fraud. One type is occupancy fraud, another type is lying about income and one my favorite types of mortgage fraud is what I called evaluation loan fraud. Where other people might call appraisal loan fraud, where people are faking the prices of properties, they are artificially inflating them to induce lenders to loan more against the property than the otherwise would.

BrokerIPTV: I am going to tough on a occupancy fraud, because when I was read around and look at it is statistics and even I talk that the revelation that occupancy fraud is may be comprising 1/5th of the fraud out there and it is something as simple as, yes I have every intention of buying this house as my primary residence, when they did, they were making it for investment, but they led everyone to believe it was going to be primary residence. To me that almost seem like the easiest type of fraud to pass by, am I correct?

Jon Goodman: Yes, it easiest because it is just making a representation on a form, its also culturally the easiest, it sort of classic wink-wink, why-why kind of lie that a lot of people have been making and for lending industry has been turning a blinds eye to that.

BrokerIPTV: How good for the mortgage industry?

Jon Goodman: Well, in Colorado I think a year from now, I think things will be better. It might get worse before then, but I think Colorado is a little bit ahead of the curve and Colorado did not get puffed up as much as some other places. So, I am optimistic about Colorado in a year from the rest of the country, only time will tell, yes.

BrokerIPTV: Jon, thanks, great information, I appreciate it.

Jon Goodman: Thank you.