FBI: Mortgage Fraud Cases, Convictions on the Rise
- Jan 14, 2008
Washington, D.C.– Federal mortgage fraud convictions more than doubled in 2007–and the FBI expects foreclosure scams to increase as the subprime crisis continues, USA Today reported Monday.Last year, the FBI initiated nearly triple the number of new mortgage fraud cases in 2003–1,210. Convictions more than doubled from the 2006 fiscal year to 2007.”We expect that number to increase again in 2008,” says FBI financial crimes section chief Sharon Ormsby, who cited low interest rates, rapidly increasing home values and risky lending practices as factors that “created the perfect storm of lending fraud.”The FBI created 34 mortgage fraud task forces and groups to look into deceptive pricing, false documentation and other potential fraudulent acts with investigators from the Housing and Urban Development, Treasury and Veterans Affairs departments in 2007. The groups investigate mortgage brokers, lenders, appraisers and real estate firms. As more Americans grow desperate to hold onto their homes during high mortgage rate resets, the FBI expects to see more foreclosure scams. The FBI also anticipates a higher number of reverse mortgage fraud schemes, involving cases in which homeowners 62 or older take out loans against their home and do not have to pay back the loan until the home is sold.