The problem of mortgage fraud continues, with the Golden State as the forerunner in a race it doesn’t want to win.
Although mortgage fraud slowed in Q3, California is now ranked No. 1 in home loan fraud – over $204.2 million in losses from fraudulent mortgage activity alone, according to a report from the Mortgage Daily. The report aggregates civil and criminal mortgage fraud cases around the country where lenders were deceived by fraudulent documentation or inflated appraisals.
Runner-up to California for fraudulent activity was New York with $199.6 million, followed by Florida, South Carolina, and Minnesota. The total losses of all mortgage fraud activities in Q3 totaled $1.3 billion, and amounted to 1,173 cases. Most of the mortgage fraud being prosecuted occurred three to five years ago but was recently uncovered by mortgage bankers who were forced to repurchase the loans.
Of course, quite a few of these cases involve all the elements of the real estate industry beyond just the borrower, including real estate agents, appraisers, escrow representatives, etc.
This should serve as a wake-up call to anyone in the real estate industry that what you do today can still be prosecuted tomorrow (or years from now). Best to stay on the right side of the law for your own sake and the reputation of the real estate industry, and report any depravity you might come across.
What do you think of these new numbers? Do you think the mortgage fraud epidemic will subside any time soon?