An immediate threat to home owners and local communities
Riverside, CA -- (ReleaseWire) -- 07/10/2007 -- Mortgage fraud is rampant throughout the United States, creating an immediate threat to home owners and local communities, according to Darren Orshoff of Wholesale Mortgage Source.
Nationwide, mortgage fraud is estimated to have cost businesses nearly $50 billion and consumers some $5 billion in the past five years, according to a recent study conducted by the Federal Trade Commission.
“Some people consider it akin to cheating on their income tax. But when a borrower makes misrepresentations about their income, personal debt, property value or down payment conditions, it can lead to a fraudulent loan situation,” Orshoff said.
“The situation becomes a problem when the borrower cannot continue to make the payments and the home goes into foreclosure and the lender has to sell the home for less than the loan amount,” Orshoff explained.
While individual cases of mortgage fraud are increasing, the major increase is from organized groups who work together in a fraud scheme.
“This can include loan officers, appraisers, lenders, attorneys, title and escrow workers and real estate agents,” Orshoff said. “The FBI reports that 80 percent of reported fraud cases involve collaboration or collusion by industry insiders.”
The FBI investigated twice as many fraud cases in 2006 as in 2005.
While many states have or are considering laws to make mortgage fraud a crime with harsher penalties, Orshoff, who hosts the CBS Real Estate Talk Radio Show The Home Ownership Roundtable, offers some tips for consumers to make sure they are not caught up in a criminal activity.
“I’d advise anyone considering a mortgage loan to get referrals from mortgage and real estate professionals or family and friends who have had a satisfactory transaction,” Orshoff said.
“They also should check their licenses and ask for background information. Always question any outrageous promises or deals and stay away from high pressure sales techniques,” he added.
Orshoff and his partners at The Home Ownership Roundtable have been in business in California for 21 years and has never experienced a fraud situation.
For information on refinancing, contact Darren Orshoff at (888) 823-2261 or visit http://www.971roundtable.com or http://www.ieloanguy.com.