This just in from the Department of the Obvious: Mortgage fraud is on the rise and the subprime lending crisis is a contributing factor.
Sorry to be a bit snarky, but I think we all know this by now. The FBI, however, wants to make sure, just in case.
In a report released today, the agency said that by the end of last year, its investigators were handling just over 1,200 mortgage fraud investigations, a
Other report highlights:
- 46,717 Suspicious Activity Reports (SARs) were filed in connection with mortgage fraud in 2007. The 2006 number was 35,617; in 2003, the FBI got just 6,936 mortgage fraud SARs.
- The financial cost of mortgage fraud is difficult to quantify, but likely astronomical. The FBI said only
7 percentof last year's SARs documented an exact dollar amount in terms of losses, but the total loss from that small percentage was $813 million.
- The variety of mortgage schemes include builder-bailouts, seller assistance, short sales, foreclosure rescue, and identity theft exploiting home equity lines of credit.
- The nation's top 10 mortgage fraud hot spots in 2007 were Florida, Georgia, Michigan, California, Illinois, Ohio, Texas, New York, Colorado, and Minnesota (in red below; the blue states are also "significantly affected" by mortgage fraud).
Getting back to that subprime bombshell, the FBI said these high-interest, high-risk loans, designed for people with poor or limited credit histories, remain a key factor in influencing mortgage fraud directly and indirectly.
The subprime share of outstanding loans has more than doubled since 2003, according to the report, putting a greater share of loans at higher risk of failure.
During 2007, nationally there were more than
We now return you to your regularly scheduled blogging program.