credit: Amy March
If you’re in the business of buying real estate then you probably pay close attention to the mortgage fraud cases that happen around the country. You want to make sure that the loans you get are legitimate loans that won’t turn nasty on you in a few years. It turns out that you’re not the only one who is paying attention to this issue; the FBI has reported that they’re seriously stepping up their efforts to stop mortgage fraud in its tracks.
There are several different aspects of the mortgage industry that may see fraud but there are two types of fraud that are currently a serious problem. The first is mortgage fraud related to sub-prime lending which we all know has been a serious problem for the real estate industry in the last couple of years. And the second is reverse mortgage fraud which targets an elderly population seeking to utilize their home equity for additional income. The FBI is targeting both of these areas of mortgage fraud in an effort to decrease the number of bad lenders out there and make mortgage loans safer for everyone.
Unfortunately this is bound to have a negative effect on the real estate industry in some ways. While it will reduce the amount of damage done to unsuspecting borrowers, it will also likely make it more difficult for legitimate real estate investors and home buyers to qualify for the mortgages they need to buy their homes. As a result, we’re likely to see a continued lull in the real estate industry while the FBI proceeds with its investigations. They are currently looking into 1300 different mortgage fraud cases, some of which deal directly with banks suspected of fraud. The hope is that a series of investigations will ultimately lead to a better mortgage market for borrowers.