Why is there so much mortgage fraud going on? Because the rewards are high while the risks of getting caught are low.
We don’t know the total cost of such mortgage frauds, but they run to at least $10 billion a year.
Many people are desperate about their difficulty paying their mortgage and desperate people are unlikely to think clearly. Therefore they are more vulnerable to fraud.
Report: Mortgage fraud remains widespread in the depressed housing market, with perpetrators motivated by high profits and little risk of getting caught, the FBI said Friday.
The FBI’s annual report on mortgage fraud said such schemes are particularly resilient and hard to discover, and their total cost is unknown. Real estate firm CoreLogic says more than $10 billion in loans were made with fraudulent application data in 2010, the report noted.
Fraud last year stayed at levels seen in 2009 as the housing market remained in distress, providing ample opportunity for schemes, the report said. It predicted that perpetrators would “continue to seek new methods to circumvent loopholes and gaps in the mortgage lending market.”