The federal crime of mortgage fraud has become a priority for federal law enforcement officials, according to a recent FBI press release. Over the last few months, the FBI and Department of Justice have undertaken coordinated efforts to arrest and prosecute those allegedly responsible for committing mortgage fraud. No doubt, the recent and continuing problems with the housing markets and foreclosures throughout Jacksonville, Florida and many other parts of the country have played a significant role in the decision to make mortgage fraud an increasing priority. In approximately three and a half months, over 400 people were charged with mortgage fraud across the country. According to federal officials, these cases involved approximately $1 billion in losses.
The crime of mortgage fraud can occur in a few different ways. A borrower may make misrepresentations on a mortgage application about his/her income, liabilities or intention for the property in order to obtain a mortgage or a better rate on a mortgage. An appraiser may inflate the value of property to entice a lender to approve a higher loan than the property used as collateral would warrant or the fraudulent and excessively high appraisal amount may be obtained to allow the buyer to quickly re-sell, or flip, the house to an unsuspecting buyer (although this is more difficult in today’s difficult housing market). There are many other forms of mortgage fraud. For more information about the various mortgage fraud schemes, go to the FBI’s website which discusses the subject.