With mortgage fraudsters operating at higher levels than they did in in the last two years, mortgage fraud remains a major problem in the depressed housing market, the Associated Press reported on the heels of a Federal Bureau of Investigation annual mortgage fraud report, released today. Perpetrators are motivated by stellar profits and minimal risk of getting caught.
More than $10 billion in loans were issued last year as a result of fraud in application forms, according to data from CoreLogic. Schemes also involved short sale fraud and the illegal flipping of houses.
The FBI had 3,129 pending investigations into mortgage fraud — a 12 percent increase over 2009 and 90 percent higher than in fiscal year 2008. Nearly three-quarters of all pending FBI investigations involved dollar losses totaling more than $1 million.
Perpetrators, the FBI said, will likely “continue to seek new methods to circumvent loopholes and gaps in the mortgage lending market. These methods will likely remain effective in the near term, as the housing market is anticipated to remain stagnant through 2011.”
Among the top states for mortgage fraud last year were California, Florida, New York and New Jersey. [AP via Crain’s]