The FBI provided a press release today concerning [Quick Flip] [FBI]

Operation Quick Flip is designed to show that federal law enforcement recognizes the mortgage fraud threat.

This is great news!

Mortgage Fraud is one of the fastest growing white collar crimes in the United States.

“Mortgage Fraud is defined as a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.

There are two types of Mortgage Fraud: fraud for property and fraud for profit:

  • Fraud for Property – 20% of all mortgage fraud – usually involves the borrower as the perpetrator on a single loan. The borrower makes a few misrepresentations, usually regarding income, personal debt, and property value, or there are down payment problems. The borrower wants the property and intends to repay the loan.

  • Fraud for Profit involves industry professionals. There are generally multiple loan transactions with several financial institutions involved. These frauds include numerous gross misrepresentations including: income is overstated, assets are overstated, collateral is overstated, the length of employment is overstated or fictitious employment is reported, and employment is backstopped by co-conspirators. The borrower’s debts are not fully disclosed, nor is the borrower’s credit history, which is often altered. Often, the borrower assumes the identity of another person (straw buyer). The borrower states he intends to use the property for occupancy when he/she intends to use the property for rental income, or is purchasing the property for another party (nominee). Appraisals almost always list the property as owner-occupied. Down payments do not exist or are borrowed and disguised with a fraudulent gift letter. The property value is inflated (faulty appraisal) to increase the sales value to make up for no down payment and to generate cash proceeds in fraud for profit.

The hot spots for Mortgage Fraud activity in 2004 (per capita) were: California, Nevada, Utah, Arizona, Colorado, Missouri, Illinois, Maryland, Georgia, and Florida.



5 Responses to “Operation Quick Flip: Finally Someone Gets Serious And May Actually Do Something About Mortgage Fraud”

  1. DIANA L CAHILL says:

    I’M GLAD THAT FINALLY SOMEONE UNDERSTANDS THE IMPACT OF MORTAGE FRAUD, I’M A VICTIM AND WOULD LIKE TO KNOW WHERE TO GO FOR HELP, AT THIS TIME THE STATE OF N.Y. FOUND ABUSE WITH THE APPRAISSER, HOWEVER THE CASE HAS TO GO TO COURT, THE STATE CAN ONLY FINE OR REVOKE THE APPRAISERS LICENSE. THE MORTAGE COMPANY WENT BANKRUPT…

  2. Vikki Cook says:

    We are victim’s to several Mortgage Companies [selling our note] along with the Mortgage Lawyers, the Closing Agent and the appraiser. We continue to be victim’s due to the lack of real true Homeowners Laws to protect Us. I was singing praises when I was inform that the FBI is really doing something and the Federal Trade Commission subpoena the Mortgage Company that holds our note and is trying to remove us from our home — even today we are still fighting! What can the American Government do for the Americans who as proof and is unable to continue the fight for our home due to ‘Posting Bonds & Lawyer Fees’??? WHY can’t the State Attorney step-in & take over for people like us; to fight for justice and we all know that when something evil lurks, then cash is not to far from the evil doers hidden treasure chest! They are defrauding the County, State and the IRS. What can the Government do for us to stop these companies and their lawyers from kicking us out on illegal practices??? You want to see major fraud >> see our paper work and yet, we are losing our home GREAT JOB FBI CONTINUE THE FIGHT FOR OUR FUTURE HOMEOWNERS >> OUR CHILDREN

  3. Robert Coop says:

    Yahoo! I fully agree with this article. As a certified Residential Appraiser. I have had the opportunity to look at many appraisal reports as part of the review process. Phew! Some were bad due to a lack of understanding. Most were outright lies. I truly hope that more regulation, and the corresponding investigation,is place on the industry. As a proffession we have failed in our resposibility. Coop

  4. If a person has a gun and note and robs a bank at two o’clock in the afternoon, it’s pretty much a guranteed thing to see, local police, county police, FBI, Secret Service and news media.

    Unfortunately when it comes to mortgage fraud where the criminal robs the bank for hundreds of thousands of dollars only the innocent victims are left on the scene.

    For those that have been victimized please by mortgage fraud please contact us http://www.perfecthomeliving.com

  5. John Kerr says:

    If the Justice Department focused this effort on actual criminals in the mortgage business that would be one thing. But like most government operations, the focus gets fuzzy when powerful bureaucrats enter the fray. My fear is that the terrifying, unholy powers of the federal government are more often used to shape facts to fit its story…namely that hoards of evildoers are ritually ripping off victim lenders, who apparently have no obligation to properly underwrite (check out) the loans they make. The result is that some percentage of wrongfully accused businessmen is being unjustly crushed along with the true con artists.