Early last week, the LexisNexis® Mortgage Asset Research Institute published its 13th Periodic Mortgage Fraud Case Report, which evaluates the current conditions of verified residential mortgage misrepresentation in the country committed by industry professionals, based on data submitted by the Institute’s subscribers.
While reports of fraud decreased 41% from 2009 to 2010, according to statistics shared during a telephone press conference hosted by the Institute, the numbers do not necessarily reflect a downward trend in occurrences. For example, Florida which tops the list of states for reported incidents, may ultimately revise its numbers far upward.
As Denise James, CFE Director, Real Estate Solutions for LexisNexis Risk Solutions explains it: “You have a coastal state that has experienced a financial crush. You have unique circumstances with second homes, speculative building, empty communities, and builders who need to recover debt. You have communities of immigrants, which can be easy targets for identity fraud. It’s hard to manage all of that.”
The decrease in reports year over year between 2009 and 2010 is believed to be the result of several factors, including a decrease in mortgage loan applications overall, less available manpower to investigate and report incidents, and new and stronger Financial Crimes Enforcement Network (FinCEN) regulations that promote peer reporting amongst industry professionals where fraud is suspected.
During the telephone press conference, Ms. James shared some specific tips for those trying to get involved in the housing market, ways in which potential buyers can fend off mortgage fraud schemes. “Knowledge is key. Do not sign documents that you are not familiar with. Educate yourself, and leverage the resources available to you. Seek out HUD information. Look at your local Better Business Bureau. The importance of knowing who you’re doing business with cannot be overstated.”