Mortgage Fraud

While mortgage originations are at their lowest level since 2001, investigations for mortgage fraud have shot up in recent years. As of December 31, 2011, the FBI reported 2,590 pending mortgage fraud investigations with 71 percent involving losses of more than $1 million.  Source:FBI

In 2007, there were 1,199 pending fraud causes, with a peak of 3,129 in 2010, according to an FBI financial crimes report. With increased levels of foreclosures and delinquencies over the past few years, mortgage fraud schemes targeting distressed homeowners as victims have surged as well.

In addition to mortgage fraud cases, mortgage fraud suspicious activity reports (SARs) saw a significant increase, with 46,717 reports in 2007, and 93,508 in 2011.

Through the year 2011, FBI mortgage fraud investigations led to 1,220 informations and indictments and 1,089 convictions. The uncovering of mortgage fraud cases brought $1.38 billion in restitutions; $116.3 million in fines; seizures valued at $15.7 million; and $7.33 million in forfeitures, according to the FBI report.

States with significant mortgage fraud problems in 2010 were Florida, New York, California, New Jersey, Maryland, Michigan, Virginia, Ohio, Colorado, and Illinois, according to Mortgage Asset Research Institute.

The FBI advises homeowners to be aware of offers which claim to save borrowers in distress and also advises against paying advances fees for promised services in return.

One type of mortgage fraud scheme involves scammers claiming they can negotiate loan modification terms on behalf of the borrowers with the lender while demanding large fees up front for the service they are purporting to offer.


4 Reasons Every Buyer Needs a Pre-approved Home Loan


Posted Mar 1 2012 by  Peter Fletcher

A pre-approval is one of the greatest assets a home buyer can get.

Pre-approval is a written assessment of your worthiness for a loan. When you seek pre-approval for a home loan, your lender will assess your ability to pay, as well as your credit history, to decide how much they are willing to lend you.

Although you can make an offer and go through to the start of property settlement without having pre-approval, smart home buyers get pre-approval before they make an offer.

Really smart home buyers get pre-approval before they even start going to home opens.

Here’s why you should, too:

1. You get a better choice of properties. When you visit a home open and talk to a real estate agent, letting them know that you have pre-approval is a sure-fire way to get them to take you seriously as a buyer. Once a real estate agent knows you’re serious about buying, they’re likely to call you about potential properties before they’ve even hit the market, giving you a better choice of properties, and potentially cheaper deals.

2. You get a better deal. To sellers, pre-approval is almost like a guarantee that the deal they strike with you won’t fall over. Sellers want certainty, because if the buyer they choose can’t get finance, the seller will have to start marketing their property all over again. To them, this certainty is worth money – I’ve seen plenty of deals where the seller has accepted a lower offer because that buyer had pre-approval and the higher offers didn’t.

3. You won’t waste time looking at homes you can’t afford. Getting pre-approval will give you a much better idea of what homes are within your price range, so you’ll know in advance which properties are too pricey to waste your time on.

4. You won’t have your heart broken. Imagine falling in love with a property and even going so far as to make an offer on it – only to find out at that it’s out of your price range! Save yourself the disappointment of having a deal fall through by knowing in advance what you can (and can’t) afford.

If you’re planning to buy a home, get a pre-approved home loan from your chosen lender. Your seller, real estate agent, and settlement agent will thank you for it – and you’ll be glad you did.

Multiple Listing Services REO category

The requirement was reported on Inman News March 7, following another story published March 4 on Palm Beach Post that revealed some banks are not wanting agents to tell if a property is indeed bank-owned.

The Palm Beach Post article stated that Wells Fargo Bank’s Premier Asset Services division instructs agents who sell their REO properties to list the owner as “Owner of Record,” rather

than specifying that the owner is Wells Fargo Premier Asset Services.

Officials with the Palm Beach Gardens based MLS told Inman News that the mandatory REO data field was already in the works before the Post published its story on the matter.

While including an REO field is not required by MLSs, stated that certain MLSs have made it an option to indicate if a property is bank-owned, but some agents opt to not fill out that information.

REO properties, which are typically viewed as requiring more repairs than non-foreclosed homes, have an advantage of selling at greater discounts and can be an attractive option to investors.

According to a RealtyTrac report, REOs sold for an average of $149,686 in the fourth quarter of 2011, which is 36 percent below the average sales price of a non-foreclosure home; the average discount on bank-owned homes for all of 2011 was 40 percent.

An article from RealtyTrac also listed the top banks to buy bank-owned properties from based on its foreclosure sales data. The banks and their REO sale price averages are Ally Financial, $60,254; Wells Fargo, $83,530; Citigroup, $68,406; JPMorgan Chase, $98,864; and Bank of America, $120,801.