Mortgage Fraud - Introduction of a Multi-Part Series

Written By: Stacey Sprain

Mortgage fraud is a growing national trend that continues to negatively affect the industry that so graciously employs us. Some analysts say that fraud is reaching "epidemic-like proportions."

Estimated Figures
The Prieston Group, a risk management solutions provider that administers an insurance product covering losses due to fraud and misrepresentation, calculated that losses attributed to mortgage fraud will most likely reach $4.2 billion for 2006. This figure does not take into account another estimated $1.2 billion spent on fraud prevention tools. Source: FBIhttp://www.fbi.gov/publications/fraud/mortgage_fraud06.htm

Fraud Hotspots
Analysis of available law enforcement and industry resources indicate that the top ten mortgage fraud areas are California, Florida, Georgia, Illinois, Indiana, Michigan, New York, Ohio, Texas, and Utah. Other areas significantly affected by mortgage fraud include Arizona, Colorado, Maryland, Minnesota, Missouri, Nevada, North Carolina, Tennessee, and Virginia. There is a strong correlation between mortgage fraud and loans which result in default and foreclosure. Source: FBIhttp://www.fbi.gov/publications/fraud/mortgage_fraud06.htm

Defense Strategies
The best defenses against mortgage fraud are education and awareness. Processors who understand definitions of common fraud schemes have a much better chance of recognizing and questioning suspicious circumstances in order to determine if their concerns are validated.

Fraud Blog Education Series
The goal of this multi-part fraud blog series is to educate mortgage processors on the various types of mortgage fraud and on the far-reaching consequences of accomplished mortgage fraud. By the end of this series you will have received the vital tools and information necessary to create your own standing policy in relation to fraud and determine ways you can effectively handle it if you are dealt the misfortune of discovering it in your day-to-day business.

**Tune in tomorrow for part 1 of this multi-part series!


About The Author

Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at: contact@mortgageprocessor.org.

 

 


Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.