Mortgage Fraud Continues to Rise
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Mortgage fraud remains a very real part of the housing market. In fact, the incidence of mortgage fraud has actually increased. Since last year, mortgage fraud has increased 36%. BloggingStocks reports on the continuance of mortgage fraud:
According to the agency, reports filed through March put fraud reports on track to top 70,000 during the current fiscal year … not a good sign.
It means that there are quite a few people out there still trying to live beyond their means, and there are several lenders who are more interested in getting the deal done than finding qualified people to lend to. This sure seems like the formula used to get us into this mess, and it sure suggests to me that some people haven’t learned their lesson.
While there are cases of mortgage fraud that include scams and similar schemes, the largest amount of mortgage fraud goes on in terms of falsifying information on mortgage applications. Most of this false information is in the form of overstating income. This is a fraudulent practice because it leads underwriters to approve mortgages to people who may not truly be able to afford them. It helps buyers get a house they can’t afford, and loan officers enjoy their commissions.
This sort of mortgage fraud is one of the reasons that we ended up with a mortgage market meltdown. Indeed, when all those people who could not truly afford their mortgages finally caved, that is when things started to go bad. It is disheartening that a desire for short-term personal gain is once again clouding judgment and continuing to result in the types of mortgages that will just default in a few years, repeating the cycle.
In order to get out of this cycle, it is necessary for us to rethink our financial policies, and how we as individuals handle our finances. Otherwise, we will just be in this place again. Only each time it happens, the crash will become progressively worse.
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July 14th, 2009 at 8:56 am
[…] have worked to make things more transparent, but in Utah, which has long been one of the worst mortgage fraud offenders, it is little surprise that something like this does not have to be as transparent as it […]