Mortgage Fraud in Florida
The federal government, including the FBI, HUD and other agencies are actively devoting more and more resources to thwart mortgage fraud. The State of Florida and Miami-Dade local officials are joining the battle.
May 09, 2009 /24-7PressRelease/ -- Mortgage Fraud in Florida
Article provided by Law Office of Ramon De La Cabada, P.A.
Visit us at www.ramondelacabadapa.com/
According to the Federal Bureau of Investigation (FBI), in 2008 Florida ranked number one in states with significant mortgage fraud problems. The Federal National Mortgage Association (Fannie Mae) reports that some of the top markets for mortgage loan misrepresentation are in Florida: Miami, Pompano Beach, Fort Myers, Florida Keys, Fort Lauderdale and Palm Beach. However, this is not just a problem in Florida; across the United States, there has been a significant increase in mortgage fraud. Financial institutions are required to file Suspicious Activity Reports if they suspect mortgage fraud; those reports have increased from 46,717 in 2007 to 62,084 in 2008, a 33 percent increase.
What Is Mortgage Fraud?
Mortgage fraud is a material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan. Basically, any information included in a mortgage loan application that is not true can be considered mortgage fraud. If the information on employment history or income is not completely accurate and that information is relied on to the detriment of the other party, it may constitute fraud.
There are two types of mortgage fraud, fraud for housing and fraud for profit. Fraud for housing, also called fraud for property, involves illegal actions by the borrower and usually one loan. Often the borrower wants to buy a house that he or she cannot afford. Sometimes the borrower is helped or even encouraged by dishonest mortgage industry professionals as well.
The FBI calls fraud for profit "industry insider fraud." This type of fraud involves a group of people defrauding a prospective homebuyer or mortgage lender. Fraud for profit usually includes multiple loans and typically much more complicated scenarios than fraud for housing.
Examples of Mortgage Fraud
Property flipping: buying property and artificially inflating its value through false appraisals. There are often multiple sales with each subsequent sale at a higher price. After several sales, the property is foreclosed on and the lender is left holding the bag.
Identity theft: a fictitious or stolen identity is used on the loan application. The individual whose name and credit history are being used often have no idea he or she is being exploited.
Silent second: the buyer borrows the down payment from the seller, but it is not disclosed. The lender does not know that the buyer is not supplying the money for the down payment.
Foreclosure rescue scams: homeowners at risk of foreclosure are enticed into paying up front fees and transferring the deed of their home thinking they can save their home. Instead, their fees are taken and properties are remortgaged.
Federal Government Initiatives
President Barack Obama announced in April 2009 that as part of his Making Home Affordable initiative there would be an effort to combat mortgage fraud. The Combating Mortgage Fraud Initiative would be a joint endeavor by several agencies including the Department of the Treasury, the U.S. Department of Justice, the Department of Housing and Urban Development (HUD) and the Federal Trade Commission. In his budget for 2010, the president requested additional funding for the FBI and HUD to crack down on mortgage fraud. This initiative would allow agencies to share information and resources between the federal agencies but also with states.
State and Local Efforts
Under Florida law, mortgage fraud is a third degree felony. It is a second degree felony if the loan amount is more than $100,000. Felonies can be punished by time in a state prison, up to 5 years for a third degree felony and up to 15 years for a second degree felony.
Mortgage fraud task forces are being formed to combat mortgage fraud in some jurisdictions with the highest rate of mortgage fraud. Mayor Carlos Alvarez, the mayor of Miami-Dade County, Florida, has formed a Mortgage Fraud Task Force. The executive board of the task force includes elected officials, government professionals, business leaders, law enforcement professionals and prosecutors. According to the mayor's office there have been 56 mortgage fraud related arrests due to efforts of the task force.
Cracking Down on Mortgage Fraud
The federal government, including the FBI, HUD and other agencies are actively devoting more and more resources to thwart mortgage fraud. The State of Florida and Miami-Dade local officials are joining the battle.
If you have any question about whether you committed fraud or could be prosecuted for committing fraud, you need to be proactive to protect yourself and talk to an attorney as soon as possible. Something that seemed like a relatively minor indiscretion could be closely looked at in this environment. Also, something small could get caught up in a larger fraud that is being prosecuted. An attorney knowledgeable in mortgage fraud laws can help you determine the best course of action to protect yourself.
Further Related Resources:
Press Release Contact Information:
PR Dept
Website: Visit Our Website
