If you're a criminal, mortgage fraud is great stuff! Big profits, short-term return on your investment, and very little chance of getting caught. The FBI says mortgage fraud is a big and growing business...no one knows quite how big, but it's well over $10 billion a year.
There are two main classes of mortgage scams. One defrauds the banks providing mortgage loans, and typically involves giving false information on a loan application, such as inflating one's income with false tax returns or pay stubs, or working with a crooked appraiser to overstate the value of a house. This type of fraud is known as loan origination fraud.
The other type of mortgage fraud, such as illegal property flipping and embezzelment of escrow funds scams the potential home buyers. This type of fraud can actually involve 'selling' the same house to more than one person!
Los Angeles, Miami, Chicago, Tampa, San Francisco, New York, Phoenix, Sacramento, Atlanta, and Las Vegas reported the largest number of mortgage fraud cases in recent years, so be careful out there!
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