'Flips' Dominate Fraud Caseload
Almost half of all mortgage fraud cases currently under investigation by the government involve land flips while just 6% involve "double-sold loans," a senior FBI official said last week.
Speaking at an industry conference, Chris Swecker, assistant director of the agency's criminal division, called mortgage fraud a "national trend" and a huge problem for the U.S., especially in light of the real estate and mortgage industry's roles in propping up the economy the past few years.
He said there is "tremendous downside" for the U.S. economy if mortgage fraud continues unchecked. But Mr. Swecker had bad news for attendees of the meeting which was sponsored by the Mortgage Bankers Association: the criminal division which investigates these cases has 2,000 fewer agents than it did four years ago.
Because of the terrorist attacks of Sept. 11, 2001, the agency has been forced to shift resources away from white-collar crime.
Another speaker, Ann Fulmer, president of the Georgia Real Estate Fraud & Prevention Coalition, said drug dealers are now moving into mortgage fraud "because the penalties are lighter."
SNAPSHOT: TYPES OF MORTGAGE FRAUD
Property Flipping 49%
Straw Buyers 39%
Straw Sellers 36%
Predatory Lending 12%
Silent Seconds 10%
Double Sold Loans 6%
Source: FBI. Note: Total exceeds 100 because in many cases, more than one type of fraud is cited.
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