The FBI is Investigating Mortgage Fraud: Are Agents Involved?

According to a new FBI report, two of the top 10 markets for mortgage fraud investigation are in California – Los Angeles and San Francisco. As agents, could you be involved?

Some of the FBI’s most scrutinized areas of mortgage fraud involve loan origination, foreclosure-rescue initiatives and short sales. According to the report, an estimated $10 billion in loans in 2010 was based on fraudulent application data – even though total loan applications submitted were well off of previous years’ averages.

According to a HousingWire story written by Kerry Panchuk:

Fraud also is occurring when parties are engaged in property flipping, loan modifications, equity skimming, builder bailouts, reverse mortgages, and title and escrow deals.

The FBI said professionals working in the mortgage industry were involved in many of the cases, with organized crime playing a significant role.

“There have been numerous instances in which various organized criminal groups were involved in mortgage fraud activity. Asian, Balkan, Armenian, La Cosa Nostra, Russian and Eurasian organized crime groups have been linked to various mortgage fraud schemes, such as short sale fraud and loan origination schemes,” the FBI said.

The FBI cites the down real estate market for creating an environment that keeps mortgage fraud alive, especially in depressed housing markets such as California’s. This has forced many agents to cut corners. With the FBI cracking down agents must be especially diligent and protect their careers, reputations and licenses.