A new Financial Crimes Report from the FBI has named Florida one the nation's top 10 hot spots for mortgage fraud. The report states that such fraud is "pervasive and growing" in the state.
The most common violations include overpriced appraisals, property flipping (purchasing a home to resell at a higher price in a short time frame), and equity skimming (using a quit claim deed to sign a property over to an investor who never pays for the property).
Lydia Pisano, president of the Orlando Regional REALTORS® Association and a team leader with Keller Williams Homestead Realty in Orlando, says mortgage fraud is definitely a growing problem in the state. She credits the hot housing market with creating a breeding ground for the fraud, particularly when it comes to inflated appraisals.
"Sellers are asking a lot more for their homes than they are worth, and now we're seeing homes not appraising and price reductions," Pisano says. She adds that the trend has led lenders to tighten their review processes and to kick back inflated appraisals as unacceptable.
Pisano says some mortgage companies also are guilty of activities or carelessness that can lead to fraud. For example, "The buyers tell the mortgage company that they make $300,000 a year, and no one ever checks it," says Pisano.
Other states cited by the report as high in mortgage fraud include Georgia, South Carolina, California, Illinois, Michigan, Utah, Missouri, Nevada, and Colorado.
Tuesday, August 30, 2005
Fla.: FBI Says Mortgage Fraud High in the State
Here is a NAR article titled Fla.: FBI Says Mortgage Fraud High in the State
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