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| FBI SEAL |
It is apparent that whatever market we are in, people find a way to commit fraud. In the boom, there was house flipping combined with buyers taking large kick-backs at the closing. Now we see another "relative" of that fraud. The FBI is working hard to target this fraud activity, and in fact have opened an office in Miami just for this matter.
In 2009, prevelant mortgage fraud schemes included loan origination, foreclosure rescue, builder bailout, equity skimming, short sale, illegal property flipping, reverse mortgage fraud and loan modifications. The following are new emerging fraud trends: economic stimulus plans/programs, property theft/fraudulent leasing of foreclosed properties and tax-related fraud.
Miami is a key city where mortgage fraud is committed. Entire neighborhoods have been effected. According to the FBI website, financial institutions reporting mortgage fraud around the U.S. increased from 6,936 cases reported in 2003 to 67,190 cases in 2009.
Short Sale fraud can be when people misrepresent their hardship, or when they sell their short sale house to a relative or friend for their own monitary gain. A typical requirement of a bank short sale approval is the assurance that there is no relation and clearly an arms length transaction between buyer and seller.
Everyone is under observation. Here is a story from a Miami Criminal Defense Lawyer Blog talking about two Broward County police officers and one FBI agent who were all recently charged with a mortgage fraud indictment.
One rule to live by is if you get a strange feeling about what someone is asking you to do, don't go along with it. Be careful with upfront fees regarding foreclosure or short sale bailouts, or with anyone who tells you to sign away the mortgage note or to not talk to your own bank. If I help a client with their short sale, I never tell them not to discuss matters with their own bank. That is a red flag to watch for.
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