Mortgage Fraud Essay

855 words - 3 pages

Mortgage fraud has been increasing globally harming homeowners, businesses and the economy. New ways to detect and prevent mortgage fraud have been developed to discover and prevent criminals before the fact; rather than after the damage has been done. The article An Insight into the World of Mortgage Fraud in the US and UK by Beverly Houlbrook talks about mortgage fraud and how it is becoming more evident “as economies enter recessionary periods and house prices tumbles” (34). It states how the global mortgage markets are providing “more opportunities for professional, innovative fraudsters to exploit and profit from loopholes and system weaknesses” (34).
Houlbrook goes on to discuss the different types of mortgage fraud ranging from soft fraud to professional mortgage fraud. Fraud for housing (a soft fraud) is when an applicant is acting alone to acquire property. In terms of volume it is the most common type of mortgage fraud based on income and employment misrepresentation on their mortgage application. Fraud for profit (a professional mortgage fraud) is when numerous borrower identities, lending institutions, “fictitious properties and overvalued professionals are involved” (34). The losses created by fraud from profit may be substantial and could lead to national and international headlines. It can also support the lifestyles of criminals by “hiding money laundering activities, arms dealing and drug trafficking” (34). Two types of fraud that is common in the US and UK is identity or house theft and occupancy fraud (buy-to-let (BLT) mortgages). House theft occurs when property is bought or financed “without the knowledge of the property owner” (35). Occupancy fraud occurs when “BLT landlords attempt to disguise buy-to-let mortgages as residential loan applications in order to benefit from more beneficial interest rates” (35).
Next, the article discusses the different products that were available now than in recent times, global trends, and the shifting balance of power between marketing and risk functions. During a comparison of markets between the US and UK a key difference in housing prices was illustrated. Housing prices in the US decreased by fifty percent and the housing prices in the UK was not really affected because there is an undersupply of housing.
A case study was done on Thamesmead (SE28); a major UK mortgage fraud. In 2007, eleven arrests were made in connection to the fraud in south-east-London. The fraud “revolved around 84 new build flats/apartments that were brought off-plan and resold at over-inflated prices” (39). A bulk of the “loans were taken out using false identities and/or mortgage mules” (39)....

Find Another Essay On Mortgage Fraud

Thailand's Rice Mortgage Scheme Essay

892 words - 4 pages such as rice exporters that disapprove, opposed with the rice mortgage scheme. In terms of economy and management, rice pledging policy has weak and vulnerable to leakage, cause higher costs that it should be. If the government continues to use the rice pledging , should focus on solving problems in management and fraud detection and adjust the price to be determined accordingly by the market. Works Cited Bangkok , Thaialnd

The Mortgate Industry Essay

1086 words - 4 pages Foreclosure epidemic was a factor in the global economic crisis, forcing devastating consumer loans and the banks to reduce or even close their doors. Public and Congress to explore the causes of the crisis and create solutions, concentrated their mortgage lending industry. Many analysts feel that mortgage originators have been relaxed or even misleading buyers qualifying for loans. The purpose of the provision was to establish the

Solving the Foreclosure Crisis: Require an Economics Class to Graduate High School

1429 words - 6 pages class in order to graduate high school; a new requirement would be added to high school graduation requirement. The basic economics or government class that is now required would also need to cover a basic understanding of money management, personal finance and of course mortgage laws and vocabulary. This would give each person who graduates high school a foundation of knowledge in the management of finance and understanding the problems

Indefeasible Title and the Torrens System: The Exceptions

1458 words - 6 pages relevant to the title to a parcel of land. A purchaser needs only to search the title and need not enquire regarding interests which are not disclosed on it.Accordingly, for example, fraud by surveyors or solicitors is currently not within the ambit of the law of NSW. Thus the fraud of a solicitor who forged mortgage documents was not visited upon his client: Schultz v Corwill Properties Pty Ltd even though the solicitor apparently had possession of

The Current Recession and Mortagage Foreclosure

3388 words - 14 pages making the borrower(s) qualified for a loan that they potentially would not have qualified for had the income been verified. 9. Fraud: A fraud scheme plans to gain profit from the properties equity. The person(s) committing the act will refinance the property and receive cash-out. The person(s) who are defrauding the financial institution never intended to make the loan payments after the mortgage loan closed. There is always a reason

JP Morgan Chase Catastrophe

815 words - 4 pages In the year of 2007, the Great Recession began. It all started at the bustling Wall Street. It was a pandemic that brought dilemma to the businesses, to the employees and to the elated new home owners. JP Morgan Chase was one of the major banks participated in falsifying the mortgage loans, and they suffered consequences for what they did. The mortgage loans gave temporary joy but longtime misery to home buyers. The federal government filed a

Subprime Mortgage Crisis

1050 words - 5 pages Subprime Mortgage Crisis Concept Background Subprime mortgage crisis is my preferred topic of discussion. The reason behind taking this topic is that housing is a basic need thus everybody needs it irrespective of the financial situation he is in. In this regard, the idea of subprime seems to be the only way to meet this need in a more professional decent manner. The case of subprime mortgage crisis presents a nice area of study on how a country

The Foreclosure Outbreak

3250 words - 13 pages structure. This act was designed to enhance consumer protection and reduce fraud by creating a unified national system known as the National Mortgage Licensing System (NMLS) that will monitor and identify mortgage professionals who are licensed in accordance with the minimum standards of this act. (N10) The SAFE Act states that a mortgage loan originator cannot offer a loan which includes quoting rates and terms without having the required

Solutions to the Foreclosure Crisis

1111 words - 4 pages set a ceiling amount on their credit cards that do not take advantage of the consumer. Interest rates on savings accounts, certificates of deposit, and money markets should increase incrementally to encourage consumer savings. Credit cards should not be issued to anyone under the age of 21 unless co-signed by a parent or guardian. We also need to eliminate the amount of fraud in the mortgage business too. Banks should be the main issuers of

Solving the Foreclosure Crisis

1170 words - 5 pages homes would be subject to inspection of living conditions and review of rental terms. All the foreclosure websites should be policed – there is so much fraud here. Fine them for crooked practices, take their listings, ban them from doing this kind of business in the future. All (of the 5 I spoke with) mortgage modification lawyers do, is look over my mortgage agreement and try to find something they can say is against the law. Then they

Solving the Foreclosure Crisis While Protecting the Free Market Economy

1046 words - 4 pages Rampant housing foreclosure in the United States is the direct result of a socioeconomic Katrina. Housing prices increased at monumental rates; home buyers purchased more expensive homes than they could afford, and at times, mortgage applicants falsified loan information to obtain a home loan. Further, to boost homeownership statistics and thus, provide citizens with the perception of prosperity, the federal government urged lenders to extend

Similar Essays

Getting A Grip On Foreclosure Essay

1072 words - 4 pages . With a little creativity and a few concessions from both the mortgage lenders and borrowers, the American Dream of homeownership can survive. The real-estate market as a whole would benefit from a solution to foreclosure as fewer foreclosed homes on the market would help restore property values for all American homeowners. The drop in the real-estate market was inevitable as home prices were over-inflated due to mortgage fraud and loose

Criminal Justice Essay

873 words - 3 pages than its counterparts. White collar crime is defined by Edwin Sutherland as "a crime committed by a person of respectability and high social status in the course of his occupation" (Conklin, 2009).While researching the Federal Bureau of Investigation's website, I found that one kind of white collar crime is becoming more and more common. Mortgage fraud is a type of white collar crime that is hitting the states ramped, but is hitting especially

Land, Stocks And Shares In The Uk

1993 words - 8 pages trained, malicious or fraudulent employees subverting procedures and controls. This is where branch staff has a huge role in the discovery and prevention of mortgage fraud. Whereas, with land, homeowners have to make sure they have the necessary insurance for their houses and lenders clarify this as it is in their best interests.

Fraud: Early Warning Signs Of Fraud

2467 words - 10 pages fraud out there. You have Medicare fraud, internet fraud, mortgage fraud, loan fraud, tax fraud, embezzlement, forgery, insurance fraud, and marriage fraud. These are only a few types of fraud. There are many more types of fraud out there and new types of fraud are being committed every day. This paper will focus on different types of fraud. The different types that will be discussed are physician identity theft, medical identity theft, corporate