Suspicious Florida Home Loan, Real Estate Activity Grows
Be careful.
That’s the message Mark Fleming, chief economist at CoreLogic, has for potential home buyers in today’s housing market. Mortgage fraud is “getting worse,” he said, speaking on behalf of the provider of fraud prevention technology that publisher of the quarterly Core Mortgage Risk Monitor.
It’s more important than ever to be on the lookout for a Florida home loan scam. The number of mortgage-related suspicious activity reports to the federal Financial Crimes Enforcement Network in the first half of 2005 was 33 percent higher than in the first six months of 2004, according to a report issued by the Mortgage Asset Research Institute.
Residential real estate loan fraud is a national epidemic, costing communities nationwide an estimated $1 billion in 2005, compared with $429 million in 2004, according to the FBI. Both reports cited conditions in the mortgage industry as factors driving the increase.
“If rising interest rates produce a significant reduction in originations for 2006, additional cases could surface in the future at a rapid rate as some originators press to maintain high origination levels,” the MARI report said.
The MARI report concluded that although 2005 statistics are still preliminary, “it appears that Florida, Utah and Georgia are leading the mortgage fraud pack.” The top five markets showing the most noticeable increase in mortgage fraud are:
- Alexandria, La.
- Pascagoula, Miss.
- Laredo, Texas
- Morristown, Tenn
- and Lakeland, Fla.
MARI noted that the number of suspicious activity reports may not be an entirely accurate representation of the amount of mortgage fraud. For one thing, only federally insured financial institutions are required to file such reports.
“We think there is a large number of mortgage fraud situations that are not covered by the statistics we report, based on SARs (suspicious activity reports),” the report quoted an FBI agent as saying.
Also, an increased number of mortgage originators are now submitting such reports, because commercial banks and thrifts, which are required to make such reports, acquired almost 150 independent mortgage banks (which are not) between 1997 and 2005.
Regardless, the MARI report concludes that incidents of fraud have risen. What can you do about it? Always be on the lookout. As you go through the Florida home mortgage loan process, double check all information and ask as many questions as you can.
