Mortgage Fraud Investigation
Mortgage Fraud Investigation
The global financial crisis has hit lending institutions all over the world. After these crises, the world has faced a prime mortgage crisis as well which are not discussed in any media but that is actually the mortgage fraud. The housing schemes were badly affected after the financial global crisis and the whole economy collapsed at once. Therefore, it became very difficult for everyone to cope up with the situation of that time. The lenders were left with nothing to pay back the amount as mostly the lenders were bankrupted after these financial crises.
Mortgage fraud is considered as a sub-category of financial institution fraud (FIF). This is a crime done through misstatement of materials or exclusion in a mortgage loan which needs to be paid by the lender. This is actually a lie which has an influence on a bank’s decisions on whether they should approve a loan or not or whether they should agree to the said repayment terms. To investigate this fraud, the FBI and other entities play their roles.
Mortgage fraud is being increased rapidly all over the world as the homeowners who are distressed are offering a new market for it to the criminals. Mortgage fraud is a bit tricky according to the FBI as this type of fraud morphs according to the latest market trends and it adapts the trends which are new in the market. However, financial institutions file SARs but still it takes many years to investigate everything.
Mortgage fraud occurs in mainly two distinct areas which are as follows:
- Fraud for Profit
The people who are involved in this type of fraud are mainly the ones who are inside the industry premises. They use their experience and knowledge to commit this type of mortgage fraud. Also, the current investigations for this type of fraud clearly indicates that there is high involvement of industry insiders for committing this fraud. Fraud for profit does not aim in securing housing schemes; instead they are involved in the mortgage lending process by misusing this process. They basically steal the cash from the homeowners or the ones lending money.
- Fraud for Housing
This type of mortgage fraud is related to the housing that how a borrower takes illegal actions in order to acquire the ownership of a house. The borrower basically shows the false income and asset information while applying for a loan and also, they misrepresent the property’s actual value. They try to give all the false information while applying for a loan so that the bank or any financial institution in which they have applied would ultimately approve the loan on the basis of documents and information provided by them.
Mortgage Fraud Schemes
There are actually many fraud schemes prevailing in the world such as illegal flipping and flopping, equity skimming, short selling, application falsification and many more. Out of all these, the most common kind of scheme is the one carried out through fraudulent application data. Therefore, it is considered as the common type of mortgage crime. This fraud is occurred by people as they fill wrong information in application form and hence try to commit this act.
Fraud Detection Tools
The two new indexes are added to the latest tools used for the detection of fraud schemes. The one is a foreclosure index which was basically added a few years back while the other one is potential collusion activity which was added with the first tool mentioned. These two are the new indexes added to the existing indexes which are used as a verified tool for detecting mortgage fraud and its misrepresentation. Through these tools, it becomes easy for the agencies to detect the person who actually committed the fraudulent act.
The FBI tries its best to provide the maximum output on the mortgage fraud and the frauds occurring in financial institutions through collaboration. They work with the collaboration of different field offices working for such financial fraud schemes throughout the country. They made Financial Crimes Task Forces which consists of federal and state regulatory and all the law enforcement agencies working in different cities. They work with all of them on a daily basis and these task forces are considered as an effective way for combining all the material collected by the agencies participating mutually for the same cause.
By participating with all of these agencies it helps the FBI in the end result. In this way, these skills and the knowledge from various departments combine together and it further helps the FBI to bring more culprits of mortgage frauds to justice. As different people work together so it somehow becomes easy to get to the end result more quickly.
How to Report a Mortgage Fraud?
If you or someone you know has been a victim of mortgage fraud then you should follow the below given steps in order to file a report for being a victim of mortgage fraud.
- Create a Fraud File
You need to collect all the relevant documents related to the fraudulent act in a single file and keep it at a place which you think is secure enough.
- Know your Rights
A person should know his/her rights given by the federal government and the state law. A person should have the knowledge related to their rights in order to protect themselves in a better way if they become a victim of such fraudulent acts.
- Contact the Appropriate Agencies
It would be beneficial for the person who is the victim of the mortgage fraud to report it to as many agencies as possible. The more they would report it to different agencies, the more would be the chances of the better outcome.
- Contact a Housing Counselor
If a fraud occurred is a mortgage fraud then the victim should instantly contact a housing counselor. In the U.S., when an individual goes for buying a home or if in any case they try to avoid foreclosure, then the Department of Housing in the U.S. provides the housing counselor to that particular individual.
These are some of the steps which an individual must keep in mind if they become a victim and they want a proper investigation for it.