The sub prime lending crisis is a contributing factor to mortgage fraud. These high-interest, high-risk loans are designed for people with poor or limited credit histories;
Sub prime loans contributed to the growing number of foreclosures filed in 2007.
In 2007, more than 2.2 million foreclosures were reported on approximately 1.29 million properties nationwide(an increase of up to 75 percent from 2006)
Existing home sales in 2008 are expected to decline by 13 percent from last year, according to the MBA. New home sales are expected to drop 15 percent from 2007. Median home prices are also expected to fall in 2008. Watch for Mortgage Fraud to continue in 2008
Mortgage fraud victims can include borrowers, mortgage industry entities, and those who live in neighborhoods affected by this crime.
You can find AJ Nisen on Active Rain at Contra Costa California Mortgages. Call AJ to talk about your Mortgage, Mortgage Rates, Free Credit Report or visit AJ's website to use his mortgage calculator.
Vickie, It is still going on. Mostly I see clients that say they want to buy a second home but more than likely it will be an investment property. We just got new guidelines on what our underwrites are looking for and what they will accept on this issue. AJ
Alan, I've gone to different mortgage fraud seminars in Ann Arbor. Both time FBI agents presented and we were told they had a special task force in MI to help with this. We did meant an investor that we throught was going to use us to participate in his scheme. We reported it, but then we were going to have to get too involved, too much time, too scary, so we didn't formally file. They should make it easier if they really want help from Realtors.
Missy, My personal view is that we need to conduct our own business with respect and honor to our profession. If each of us acts accordingly, we will limit the amount of fraud. On the other hand, if there is blatant fraud occurring, I would report it. Mortgage Loan Officers may just be a notch above lawyers as how the public views our profession. AJ
Hi AJ, I'm sure that there's a lot that has been going on about which none of us are aware. Just the few that I do know about, throws me for a loop. Where there's a way, someone will figure out how to get something for nothing. I've heard it's big in Arizona too....;-)
I am a Realtor with a total of 18 yrs experience . Throughout this mortgage/real estate crisis I am in total agreement with someones summary. You put the blame where it should be. It's the little guy who is paying, not the banks, not the mortgage brokers, etc.
My question all along is " how come mortgage brokers can hire unlicensed people to process a mortgage". Nearly every mortgage brokers offcice I know had unlicensed people working for them. Real Estate agents must have a license, yet those people handle individuals finances and sensitive information and all without a license.
I purchased my house in september 2005, my credit was over 700, and I got a fixed rate of 5.25. I bought the house I rented for 10 yearsa knowing it needed upgrading e.i. plumbing, painting (interior and exterior, electrical, HVAC, etc. etc. I had no prepay, therefore I applied for a equity lne of credit. The mortgage broker told me I had to refinance (which I know better now) and so she processed my loan. When the loan closed I ask her when to expect the line of credit and was told it would take 10 to 14 days to receive the coupon booklet from the lender.
3weeks later I still had not received it so I phoned and was told that the unlicensed mortage officer never applied for my equity line, she made her money on the refinance, which had a 3 yr prepay. When I contacted her (several attempts) she made headline news by having killed her boyfriend, in addition the media report stated that she was on federal parole for having robbed 2 banks. This is the person who did my refinance. She is in jail now.
I was still out of money for the upgrades, and went to the 1st mortage broker who got me the loan to buy my house. He too told me that I had to refinance and also told me that the prepay from the prior agent would be approx $8,000. Well I got my equity line of credit along with closing costs and a $16,000 pre pay.
I am now joining the rest of the NOD home owners, hoping to make good before the foreclosure gets processed.
My house is now worth approx $575,000 from $750,000, I owe $740,000 and the goverment has bailed out the banks, the mortgage broker are unemployed or scamming somewhere else, but we are holding the bag of debt.
AJ - thanks for helping get the word out there. Even though the market has changed, mortgage fraud has not gone away. Not only that it has morphed to include foreclosure fraud, credit repair fraud and a variety of other scams.
Alan 'AJ' Nisen California Contra Costa Mortgage Officer Lafayette, CA More about me…
A Large Bank in America
Office Phone: (925) 677-4169
Cell Phone: (925) 963-5836
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AJ, as part of the Active Rain family, uses this forum to discuss issues that affect the Real Estate market, all aspects of Mortgages, Loans and refinancing, to build working relationships and friendships. AJ’s conversations include such topics as, the sub prime lending fallout, mortgage market changes, and localism (revitalizing downtowns, business growth, community volunteerism and events)
Alan 'AJ' Nisen California Contra Costa Mortgage Officer
The Federal Bureau of Investigation's fiscal year 2007 Mortgage Fraud Report
AJ - thanks for helping get the word out there. Even though the market has changed, mortgage fraud has not gone away. Not only that it has morphed to include foreclosure fraud, credit repair fraud and a variety of other scams.
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I can't believe that mortgage fraud is still going on in 2008...and expected to increase. Unbelievable!