Mortgage fraud still soaring

Underwriting control is not able to affect mortgage fraudThe housing market is turbulent and recently govt. has enacted tougher lending standards. So, the normal expectation will be of lowering numbers of fraudulent activities. But the scenario is not as expected.

Even after strict standards, the mortgage fraud is still occurring at a higher number.  According to a report by the Mortgage Asset Research Institute (MARI) such fraud cases are increasing.

If you see the numbers, then you will be shocked. In 2008, during the first three months, the number of fraudulent mortgage issued increased a whopping 42 percent from the last year same time.

Loan applications are lowest in the last eight years, real estate professionals are trying hard for clients and the underwriting standards have been tightened. In such situations credit histories of many of the borrowers are not good enough to get them a loan. In such cases the loan officers and brokers are trying to be creative to get their clients past through the mortgage screening.

The most common fraud happening is exaggeration of income and misrepresentation of the job description.

The problems of incorrect debt report and undisclosed debts, judgments and liens helped in such a huge increase in the number of mortgage fraud. Most of the mortgage fraud involves loan officers and brokers tweaking the information, but some of them involve criminal enterprises. Criminal fraud cases and identity theft has been other causes of such gigantic rise in the numbers of frauds.