Rise in Mortgage Fraud by Identity Theft Criminals Who Target Consumers with Good Credit

According to a recent report released by the Identity Theft Assistance Center, a nonprofit group, identity theft criminals are involved in mortgage fraud.   Criminals are targeting consumers with good credit that have equity in their real estate properties.   Identity thieves are fraudulently opening up home equity lines of credit with banks and other financial lending institutions under the unsuspecting real estate property owners' names.  Most of this activity is done online because little documentation is needed to establish a home equity line of credit.

One reason why home equity lines of credit are popular among criminals right now is there are large pools of money available, and property owners do not check their credit reports regularly. After identity thieves open an equity line of credit account, they send a written request to the bank authorizing the bank to wire funds to a different bank account under their control. 

The Federal Bureau of Investigation's annual mortgage fraud report, which was recently released, showed home equity fraud to be on the rise due to the declining real estate market conditions right now.

In the past, identity theft criminals targeted consumers with poor credit because it was easier to obtain sub prime mortgages with very little documentation.  Since lenders have tightened their lending guidelines and documentation requirements, the criminals have switched to preying on consumers with good credit.

Most lending institutions will reimburse victims of identity crimes, but it is quite a hassle to go through the process and could easily be avoided if consumers would regularly check their credit reports with either of the three credit reporting agencies.  Consumers can also enroll in identity fraud detection services such as the one offered by the Identity Theft Action Center, called ITAC Sentinel or with any of the major credit bureaus Equifax, Experian and TransUnion who also offer monitoring services. The enrollment fees are nominal and are quite worth the protection services that they provide to consumers.