In the last decade, mortgage fraud has exploded, with lenders, title companies, consumers and neighborhoods all feeling the sting of financial loss. State legislatures and banking regulators have responded, and federal and state prosecutors have investigated and prosecuted fraudsters. Neighborhood groups have taken on the role of activists in recognizing and reporting suspicious activities occurring upon properties purchased by charlatan “investors.”
Lenders have been forced to foreclose literally thousands of loans. In the case of loan flip schemes, where property has been overvalued by unscrupulous appraisers, lenders are left to deal with substantial losses while so-called mortgage investors and other conspirators taking part in the fraudulent schemes walk away with substantial profit.
