| Once a nuisance to a handful of lenders, mortgage fraud has blossomed into one of the fastest-growing white collar crimes in the United States. It puts innocent homeowners on the hook for overpriced houses and pushing up interest rates for all home-loan borrowers. In some cases, scammers purchase dilapidated buildings, obtain fake appraisals to inflate the value and sell the homes for far more than they’re worth, industry experts said. Or, fraudsters will find novice real estate investors and convince them to sell their good name and credit record. In return, scammers promise to arrange a loan on an investment property, find tenants, make mortgage payments and sell the property for huge profits once it appreciates. Instead, the fraudsters use the borrower’s name on loan documents — and then walk away with hundreds of thousands of dollars in loan proceeds. “No tenants are found, no rental payments are collected, no mortgage payments are made, the house goes into default, turns out it’s not worth anything, and the borrower is left holding the bag and their credit is destroyed,” said Rachel Dollar, an attorney in Santa Rosa, Calif., who represents lenders in mortgage fraud cases. Or, identity thieves use stolen information to buy properties in victims’ names, pocketing the loan and leaving the victim and the lender to sort out the mess. Often, the borrower is a willing accomplice, but these schemes, which the FBI calls “fraud for profit” and which account for about 80 percent of mortgage-fraud cases, usually require the work of an industry insider. “It’s hard to perpetrate fraud-for-profit without some kind of third- party professional being involved, whether an appraiser, loan officer, real estate broker - someone to extract the money from the lending channel,” said Mark Fleming, chief economist with CoreLogic, a firm in Sacramento, Calif., which makes tools for lenders to assess fraud risk. The other 20 percent of mortgage fraud is “fraud for property,” in which borrowers lie about their income or assets to buy a home, but for which they intend to pay. Lenders lost over $1 billion to mortgage fraud in fiscal year 2005, up from $429 million a year earlier, and $156 million in fiscal year 2000, according to the FBI, which currently has 748 mortgage-fraud cases pending, up from 436 in 2003. But those dollar amounts understate the true damage, experts said, because the FBI’s numbers are based solely on data provided by only about one-third of all mortgage lenders nationwide. Plus, mortgage fraud often goes undetected in hot housing markets: Inflated appraisals become moot if home values rise to match those figures. Lawmakers, including Sen. Barack Obama, D-Ill., recently proposed legislation to address the issue. And lenders appear eager to tackle the problem: The Mortgage Bankers Association is scrambling to make room for more attendees after initially selling-out its first-ever fraud conference, to be held in May. Obama sponsored a measure that would increase funding for federal law enforcement programs, create new criminal penalties for mortgage professionals found guilty of fraud and require industry insiders to report suspicious activity. “Mortgage fraud is robbing thousands of Americans of their dream of homeownership, and costing the mortgage industry hundreds of millions of dollars each year,” Obama said. “Congress needs to come to the table and do its part.” Obama’s proposed bill, written in consultation with the Treasury Department, Attorney General Lisa Madigan and Chicago police, would authorize increased federal funding for mortgage counseling. It also would grant funding to the state agencies that license and monitor appraisers and other real estate professionals. Obama’s bill would authorize $10 million more for anti-mortgage fraud programs in the Departments of Justice and Housing and Urban Development. It also would require the FBI to update bankers on fraudulent activity in a formal, systematic way. Today, real estate attorneys, companies and trade groups rely on several industry Web sites that use news articles and government press releases to disseminate fraud reports from across the country. And the bill would establish a national database of mortgage professionals who have been sanctioned by state or federal regulatory agencies. For borrowers who become unwitting victims, the effects can be devastating, including losing a home through foreclosure once it’s revealed the house is worth far less than the mortgage loan. This usually happens when the borrower goes to refinance or sell and a true appraisal is done. Lenders will often work with unwitting fraud victims to try to keep their credit from being ruined, Dollar said. But many borrowers simply don’t want to be on the hook for more money than their homes are worth. Many just walk away, damaging their credit. Some wind up filing for bankruptcy. To some degree, borrowers everywhere pay for mortgage fraud, as lenders cover losses by charging higher interest rates overall. But some say that hit is negligible. “It’s probably less than an eighth of a [percentage] point because of the scale of fraud versus the industry as a whole,’ Fleming said. The industry originated $2.8trillion in mortgages in 2005. |
WESTWOOD, NJ — (Market Wire - Apr 06, 2006) – With all the interest surrounding Google and Yahoo! these days, smaller niche sites are getting a lot of attention.
Relative to colossal engines, smaller sites refine and improve searches while continuing to maintain the benefits of Google that internet surfers have become accustomed to. By querying the internal database for a specific group first, users can prioritize what turns up when doing a search.
These niche search engines offer what bigger ones cannot. The smaller the site, the easier it is to concentrate on the popularity of the imperative keywords. Most importantly, these smaller targeted sites work well at dominating specific markets.
BetterBrokers.org is one of the newer and exciting engines fitting this description for real estate, mortgage, securities, insurance and business brokers.
The site’s homepage is designed in a simple and easy to use layout where the user can type what he is looking for based on preference. A search occurs based on the pertinent details of the individual broker’s profile.
Since its inception in 2003 by the Better Brokers Council, BetterBrokers.org also relies on a mission statement and honor code that helps ensure consumers are searching only the best and most reliable brokers “to help preserve the integrity of the brokerage industry.”
To attain membership, brokers must abide by the honor code “to strive for full moral stature and to realize their fiduciary responsibility to their clients.” This ensures that those searching for a broker will get a respectable, ethical agent who he can trust and rely upon for their business needs.
Essentially, the site allows users to narrow down the precise type of broker they are looking for and thus yield only the best results since each broker has promised to uphold the values of the site’s mission statement and honor code.
Brokers listed on the site upload a profile which states their area of expertise, where they are licensed, and how they can be contacted if one is interested in utilizing their services.
As BetterBrokers.org continues to grow, it is offering an exciting opportunity for potential new members. The site will give the next 25,000 people who sign up free membership, waiving the modest $5.85 monthly membership fee to have their profile searchable.
With a 78% quarterly increase in membership, the industry at large has certainly picked up on the trend. Brokers around in the United States have saved the site as their homepage. This makes BetterBrokers.org one of the most exciting and reliable search engines for people to use to help find a reliable broker without actually contacting them.
