FBI Says Mortgage Fraud Continues to Rise

January 14, 2008 No Comments »

The FBI saw a substantial increase in mortgage fraud cases and convictions during 2007, and expects that rise to continue this year, USA Today reported today.

Last year, the FBI opened 1,210 mortgage fraud cases, almost three times the number in 2003, while convictions more than doubled to 260 from 123 in 2006.

And the agency expects those numbers to move even higher this year, as scams related to foreclosure assistance programs and reverse mortgages swell.

FBI financial crimes section chief Sharon Ormsby said she expects those numbers to climb even higher in 2008, as desperate times call for desperate measures.

Ormsby also noted that the FBI created 34 mortgage fraud task forces last year, groups developed to investigate mortgage brokers, mortgage lenders, and appraisers engaged in suspicious activity.

In recent months, many states have begun to take steps to protect consumers from mortgage fraud, including better oversight, improved disclosure, and complete reform.

Two weeks ago, the so-called Nationwide Mortgage Licensing System was launched in seven states to better monitor mortgage brokers and loan officers at state-regulated banks.

And last Thursday, the OFHEO announced that it was changing the way it reports and identifies fraud in an effort to minimize the problem, especially internally.

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