Edward J. Hershewe General Practice Law Blog on Lawyers.com

The subprime lending crisis, distressed real estate prices, and record foreclosures have given new life to what has in the past been a relatively low-profile criminal activity: mortgage fraud. The Federal Bureau of Investigation defines mortgage fraud as "the intentional misstatement, misrepresentation, or omission by an applicant or other interested parties, relied on by a lender or underwriter to provide funding for, to purchase, or to insure a mortgage loan."

There are two primary types of mortgage fraud: fraud for property or housing, which usually involves a single loan for a primary residence, and fraud for profit, which is likely to include multiple loans and more elaborate schemes. No one regulatory agency has sole responsibility for monitoring mortgage fraud; rather, it is investigated by a multitude of federal, state, and local agencies, including the FBI, the Department of Housing and Urban Development – Office of Inspector General (HUD – OIG), the Internal Revenue Service, and the Postal Inspection Service.
    
In February 2009, the FBI had more than 2000 active investigations underway, with 734 cases opened in Fiscal Year 2008, compared to only 295 five years earlier.
The bureau identified the top 10 mortgage fraud states as:
2008        2007
Florida     Florida
Nevada         Georgia
Michigan     Michigan
California    California
Utah         Illinois
Georgia     Ohio
Virginia     Texas
Illinois     New York
New York     Colorado
Minnesota     Minnesota
   
Arizona, Maryland, Missouri, Indiana, Tennessee, Virginia, New Jersey, and Connecticut also have significant mortgage fraud problems. Mortgage fraud is a problem in every state, including Arkansas.

Article provided courtesy of The Hershewe Law Firm, 417-782-3790, www.h-law.com.