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The FBI delineates mortgage fraud in two distinct areas: 1) Fraud for Profit and 2) Fraud for Housing. Fraud for Profit uses a scheme to remove equity, falsely inflate the value of the property or issue loans relating to fictitious property(ies). Fraud for Housing represents illegal loan net cash usa qualification actions perpetrated by a borrower, typically with the assistance of real estate professionals. The simple motive behind this fraud is to acquire and maintain ownership of a house under false pretenses. The FBI compiles data on mortgage fraud through Suspicious Activity Reports (SARs) filed by financial institutions and through the Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) reports.
The FBI also receives complaints from the industry at large. While a significant portion of the mortgage industry is void of any mandatory fraud reporting and there is presently no central repository to collect all mortgage fraud complaints, SARs from financial institutions have indicated a significant increase in mortgage fraud reporting. For example, during Fiscal Year (FY) 2008, mortgage fraud SARs increased more than 36 percent to 63,173.
The total dollar loss attributed to mortgage fraud is unknown. Only 7 percent of SARs report dollar loss because of the time lag between identifying a suspicious loan and liquidating the property through foreclosure and then calculating the loss amount. One proposal informally discussed within the FBI is the creation of a mandatory reporting mechanism (beyond the current SAR requirements, which only depository institutions are required to file) to allow industry insiders to be the front line in preventing mortgage fraud.
Based on current and past investigations, the FBI has recognized that the financial industry is susceptible to a number of vulnerabilities through industry insiders and other individuals involved in loan and finance transactions.
FBI would like to work with FinCEN to expand the exercise of their payday one loans statutory net cash usa authority under the Bank Secrecy Act (BSA) to consider the implementation of SAR and anti-money laundering program requirements on some of the businesses and professions that currently fall outside the scope of SAR reporting. A vigilant industry combined with this reporting stream, when made available to the FBI and HUD, would be a major step forward in addressing the practice of mortgage fraud.
The current financial crisis has produced one unexpected consequence: it has exposed prevalent fraud schemes that have been thriving in the global financial system. These fraud schemes are not new but they are coming to light as a result of market deterioration.
For example, current market conditions have helped reveal numerous mortgage net cash usa fraud, Ponzi schemes, and investment frauds, such as the Bernard Madoff alleged scam.
The FBI has experienced and continues to experience an exponential rise in mortgage fraud investigations. The number of open FBI mortgage fraud investigations has risen from 881 in FY 2006 to more than 1,600 in FY 2008.
In addition, the FBI has more than 530 open corporate fraud investigations, including 38 corporate fraud and financial institution net cash usa matters directly related to the current financial crisis. These corporate and financial institution failure investigations involve financial statement manipulation, accounting fraud and insider trading. Although there are many mortgage fraud schemes, the FBI is focusing its efforts on those perpetrated by industry insiders who are part of organized enterprises engaged in mortgage Fraud for Profit.
Industry insiders are of priority concern as they are, in many instances, the facilitators that permit the fraud to occur. The FBI utilizes SAR data to help identify fraud schemes perpetrated by insiders. However, SAR data does not capture suspicious activity identified by the entire mortgage industry. Requiring the entire industry to report suspicious activity would give us a more complete data set to exploit. The FBI is engaged with the mortgage industry in identifying fraud trends and educating the public. Some of the current rising mortgage fraud trends include: equity skimming, property flipping, mortgage identity-related theft, and foreclosure rescue scams. Equity bad credit personal loans az skimming is a tried and true method of committing mortgage fraud and criminals continue to devise new schemes.
Property flipping is nothing new however, once again law enforcement is faced with an educated criminal element that is using identity theft, straw borrowers and shell companies, along with industry insiders to net cash usa conceal their methods and override lender controls.
Identity theft in its many forms is a growing problem and is manifested in many ways, including mortgage documents. The payday loans online no faxing mortgage industry has indicated that personal, corporate, and professional identity theft in the mortgage industry is on the rise. Computer technology advances and the use of online sources have also assisted the criminal in committing mortgage fraud.
However, the FBI is working with its law enforcement and industry partners to identify trends and develop techniques to thwart illegal activities in this arena. As foreclosures continue to rise across the country, so too have the number of foreclosure rescue scams that target unsuspecting victims. These cheap installment loans scams include victims losing their home equity or paying thousands of dollars in fees, and then receiving little or no services, and ultimately losing their home to foreclosure.
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Since January 2007, the FBI has increased its agent and analyst manpower working mortgage fraud investigations. The team provides tools to identify the most egregious mortgage fraud perpetrators, prioritize pending investigations, and provide information to evaluate where additional manpower is needed. One of the best tools the FBI has in its arsenal for combating mortgage fraud is its long-standing partnerships with other federal, state, and local law enforcement. In response to a growing gang problem, for example, the FBI stood up Safe Streets Task Forces across the country.
In response to crimes in Indian Country, the FBI developed the Safe Trails Task Force Program.
In response to this new threat, the FBI stood up Mortgage Fraud Task net cash usa Forces across the country.
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While the FBI has increased the number of agents around the country who investigate mortgage fraud cases from 120 special agents in FY 2007 to 180 special agents in FY 2008, this multi-agency model serves as a force-multiplier, providing an array of resources to adequately identify the source of the fraud, as well as finding the most effective way to prosecute each case, particularly in active markets where fraud is widespread.
We are pleased to report that the model is working. That operation focused primarily on three types of mortgage fraud: lending fraud, foreclosure rescue schemes, and payday loans memphis tn mortgage-related bankruptcy schemes.
In addition to the effort placed in standing-up mortgage fraud task forces, once a month the FBI is one of the DOJ participants in the national Mortgage Fraud Working Group (MFWG), which DOJ chairs.
The MFWG represents the collaborative effort of multiple federal agencies and facilitates the information sharing process across the aforementioned agencies, as well as private organizations.
Together, we are building on existing FBI intelligence databases to identify large industry insiders and criminal enterprises conducting systemic mortgage fraud. Postal Inspection Service, the Commodity Futures Trading Commission, and the Financial Crimes Enforcement Network. The purpose of the Corporate Fraud Task Force is to maximize intelligence sharing between membership agencies and to ensure the violations related to corporate fraud are appropriately addressed. In addition, since April 2007, FBI Headquarters personnel have met with representatives from the Securities and Exchange Commission once a month to coordinate the respective Corporate Fraud inventories focused on the current financial crisis and to share intelligence.