If there is one thing that everyone needs to be aware of it is mortgage fraud. And the problem has been so prevalent in Kansas City that the FBI stated that we, yes we, were one of the worst cities in America for this kind of felony. If you have been watching the news recently you would have seen that even mayoral candidates and a sitting city councilwoman have been indicted on mortgage fraud counts.
The Kansas City Star http://www.kansascity.com/mld/kansascity/business/16503526.htm has a different story almost daily on different real estate fraud schemes that affect everyone in town through higher mortgage rates, taxes for law enforcement, etc. Fortunately through stories like these the problem is becoming more and more well known and real estate professionals are beginning to take action.
Some of the better known ways to commit mortgage fraud are;
- misstating income on mortgage application
- appraisal coming in higher than is realistic (especially with refinances)
- non-approved and/or non-disclosed seller incentives to aid buyer
- undisclosed “forgivable” second mortgages
- inflation of purchase price to allow for “built-in” down payment
- a mortgage broker turning in to the end lender incomplete files or files with additional documents not available to everyone
Sadly, I could go on and on with different scenarios in which you can commit this crime. There is a perception that no one gets hurt. But with skyrocketing foreclosure rates which can lead to decreasing neighborhood values, I think you will see that it touches everyone.
And excellent blog read from a Michigan real estate agent can be found at http://activerain.com/blogsview/38652/UnMasking-the-Face-of showing how each and every one of us needs to be cognizant to this crime and do what we can to prevent it.
Your comments and opinions on this are welcome. Especially if you have war stories of your own. Maybe some time, with permission, I will share a few of the horror stories my clients have been through.