Mortgage Loan Fraud

How to Avoide the Foreclosure Trap - Don't Borrow to Buy a Home

In recent months federal and state law enforcement and regulatory agencies have been inundated with reports of mortgage loan fraud. This comes on the heels of a downturn in the real estate market, lowered earnings expectations from publicly traded home builders and complaints about realtors, mortgage brokers, appraisers, escrow officers, and title insurance agents.

Civil suits between private parties engaged in real estate transactions has risen by 25% in the third quarter of 2006 while notices of default, foreclosures and bankruptcies are expected to reach all time highs across the nation in 2007.

Although various organizations, both governmental and private have devoted considerable effort to the prevention, investigation and prosecution of mortgage loan fraud, there has emerged a massive amount of evidence that securitized mortgages collateralized by state income-stated asset loans contain the highest incidence of fraud of any other loan product with several major financial institutions at severe financial risk of having many of these loans become non performing as rates adjust upward during the next 12 months.

The United States has experienced substantial growth in mortgage lending markets and of unusual loan products that have fraudulently expanded consumer access to home finance. 97% of those who currently own homes in California and New York do not qualify to buy their own homes.

At the same time there has been a significant increase in filings of complaints from the general public and suspicious activity reports from financial institutions accepting cash deposits of over $4 trillion during the past six years as the refinance boom came and went. Most of these deposits were from loan proceeds on refinances of existing equity in homes.