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Author Topic: A Quarter Of Foreclosed Homes Show Mortgage Fraud - Tip of Iceberg?  (Read 1411 times)
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WhiskeyGirl
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« on: August 24, 2010, 08:34:59 AM »

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Dallas' mortgage fraud clustered in 75201 ZIP code, study finds

12:00 AM CDT on Friday, August 13, 2010

Dallas' 75201 ZIP code includes the snazzy Arts District, some of the city's tallest skyscrapers and a chunk of fashionable Uptown.

The area is also ground zero for North Texas mortgage fraud.

From 2005 to 2009, more than 13 percent of the home mortgages made in 75201 turned out to be fraudulent, according to a study done for The Dallas Morning News by researchers at CoreLogic.

In most cases, the fraud came when folks buying pricey condos lied about their income or identity. Or investors claimed they were going to live in the units when they really had no such plans.

Either way, it was illegal. And surprisingly common.

Almost a quarter of the homes foreclosed across the country in recent years show evidence of loan fraud. Other common tactics have included lying about employment, hiding debts or faking assets.

Are any of these folks going to jail?

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For all the D-FW area, CoreLogic estimates that less than a quarter of a percent of the home loans made during the five-year period were fraudulent. That works out to about 22 cents for every $100 in loans.

Compare that with the national average of 0.55 percent, or 55 cents out of $100, and the D-FW area looks pretty good.

And it's chicken feed compared with Orlando, Fla., Miami, Atlanta and Detroit, where the rate of mortgage shams was more than three times the national average.

No Texas cities made CoreLogic's list of the top 20 U.S. locations for home loan fraud.

Florida, South Carolina, North Carolina, California and Georgia were the highest-ranking states for fraudulent mortgages.

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"Our 2010 fraud index indicates that mortgage fraud risk is on the decline," said CoreLogic senior vice president Tim Grace. "But with an estimated $14 billion in fraud losses experienced in 2009 alone, fraud is still a major issue for the mortgage industry.

"While the industry has done good work, there is evidence that fraud patterns are changing and becoming increasingly better hidden."

Who's paying for all those fraud loans?  At inflated housing prices?  Taxpayers?

http://www.dallasnews.com/sharedcontent/dws/bus/columnists/sbrown/stories/DN-recol_13bus.ART.State.Edition1.26cbeb4.html
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WhiskeyGirl
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« Reply #1 on: August 24, 2010, 08:39:44 AM »

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Old habits are hard to break, and in the United States of America, there are few “habits” as common as mortgage-fraud. In 2006, the world discovered that the U.S. housing market was the most-fraudulent market in history. However, since that time, even that level of fraud has been surpassed – by the U.S. housing market of 2010.

Incredibly, four years after learning that the U.S. housing market was the global fraud-capital, U.S. mortgage-fraud has continued to increase every year. There is simply too much material here to cover even a small portion. For inquisitive readers, I recommend doing a simple Google-search for “U.S. mortgage-fraud increasing”.

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One of the more hilarious/disturbing search-results was a Reuters article from April 2009, where the U.S. Justice Department “urged Congress” to force U.S. banks to keep records of their mortgages. The Justice Department stated unequivocally that such record-keeping would make it much easier to crack-down on fraud.

Naturally, nothing has been done on that front – since the U.S. government likes mortgage-fraud. Here’s why. A Reuters article released yesterday on U.S. mortgage-fraud reported the case of a run-down Chicago home, which sold for $25,000 in a foreclosure auction, and then was quickly “flipped” in a fraudulent transaction for $355,000.

Pull out your calculator, and you’ll discover that this phony transaction resulted in a (fraudulent) price-rise of more than 1,300%. Put another way, if there were 100 non-fraudulent transactions, each of which reported a 5% decline in prices, and we add in the one fraudulent “sale”, suddenly those 101 sales show a “rising” U.S. housing market, once averaged-out (instead of the falling market which exists in the real world).

Is the economy really improving?

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“The Warning” is a PBS documentary which goes back to the roots of current, U.S. mortgage-fraud, during the years of the Clinton regime. Of principal note was the position of U.S. Federal Reserve Chairman, Alan Greenspan – who was adamant that “market fraud” should not even be illegal in the U.S.  Greenspan’s position was that the market should be left alone to “resolve” this fraud “in its own way” (i.e. through the fraudsters taking every last dime of the “sheep”).

What more needs to be said when you have the government of the world’s largest economy taking the position that rather than being a “problem”, that mortgage-fraud was a “solution to problems” (i.e. the crashing U.S. housing market)? Let the fraudsters artificially pump-up the prices of U.S. homes through their phony transactions, et voila we have a “U.S. housing recovery”.

more here - http://seekingalpha.com/article/221123-u-s-mortgage-market-even-more-fraudulent-today

I've been wondering about all the reverse mortgage business, when will that bubble burst and how much will it cost taxpayers?  How much more taxpayer money will go to global players?

When will Washington work for "We the people..."?
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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