The short answer to that question is, not any time soon. According to the Mortgage News, the FBI has been working in states that recently passed residential mortgage fraud acts to stay abreast of the latest fraud tactics. They have found that those committing fraudulent activities are taking advantage of others and have clever ways to hide their intent. Some of the mortgage fraud happening today:
Flipping vs. Serial Flipping: A fraudulent flip is when it increases the value by using an inflated appraised value. This example from Mortgage News: "if a property was purchased for $175,000 and soon thereafter was sold for $500,000, most professionals would notice. However, serial flipping is trickier. Say a house sold for $175,000, soon after sold for $250,000, then $325,000, then $400,000 and then $500,000. Fewer professionals would even raise an eyebrow. This scheme takes more time, but the end result is the same: fraud."
Chunking: This is similar to flipping, but involves multiple loans to the same person rather than multiple sales. Often this begins when attending "get rich quick" real esate seminars. Knowing a person is vulnerable, they are contacted by a third party who offers them an investment opportunity. This third party acts an agent and submits loan applications on the borrower's behalf (often without their knowledge). At closing, he then pockets the loan, leaving the borrower with the debt.
Fraudulent Qualification Documents: Incorrect or completely false statements of bank balances, employment, income and credit records provide false information regarding the borrower’s ability to qualify for a loan. These are becoming increasingly common due to sophisticated editing software.
Bogus Assignment Fees, Liens or Invoices: Misrepresentations, inflated prices, inflated appraisals and even shell companies fall under this category of fraud.
Reverse Mortgage Fraud: Those seeking ways to creating fraudulent acts find foreclosed, empty or distressed properties. Seniors are recruited to purchase the property without the exchange of money. After living there for 60 days, the seniors obtain a reverse mortgage using an inflated appraisal, usually based on repairs or remodeling that were not done. A lump sum disbursement of the equity is requested, and the fraudster takes the funds at closing. Unfortunately, this type of fraud is not often discovered until after the death of the borrower.
These are just some scenarios that the FBI is investigating. When you're ready to invest, purchase, refinance or obtain a reverse mortgage, it is in your best interest to work with someone you know and trust. As in most every situation, if it sounds too good to be true, it is too good to be true! Grandview Lending will be happy to assist you with all of your mortgage needs. READ MORE