09-17-2004, 04:41 PM
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Administrator
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Mortgage Fraud Epidemic
Fraud is running rampant in the nation's mortgage industry, with nearly three times as many reports of suspicious activity so far this year as in 2001, a top FBI official said Friday.
"It has the potential to be an epidemic," said Chris Swecker, FBI assistant director for criminal investigations.
Through the first nine months of 2004, mortgage companies and banks have reported more than 12,100 instances of suspicious activity compared with only 4,220 in 2001. The FBI currently has 533 pending mortgage fraud investigations, compared with 102 in 2001.
Law enforcement officials say the lending and refinancing boom that accompanied record low interest rates in the past few years is a key reason for the increased fraud. The FBI has identified several "hot spots" around the country where fraud is especially prevalent, including Florida, California, Nevada, Michigan, Missouri and Illinois.
One common mortgage fraud scheme is "property flipping," in which property is purchased, appraised fraudulently at a much higher price and then quickly sold. The mortgage holder is then left with property actually worth much less than the loan it issued... usatoday.com
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