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Mortgage fraud still on the rise

May 19, 2010

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Despite the efforts of the federal government including the Mortgage Fraud Task Force, incidents of mortgage fraud/real estate fraud continue to climb. New regulations and stricter lending policies are still unable to curtail the illegal activity. According to a recent report, reported incidents of mortgage fraud climbed 7% in 2009, however, the number are down from a 28% increase in 2008. Apparently, the money and man hours being thrown at the problem are beginning to pay dividends for the federal government. For the past several years Miami criminal defense lawyers have been representing clients in both state and federal court. The office of the United States Attorney prosecutes the cases in federal court, while the majority of state prosecutions are handles by the statewide prosecutor's office. The local state attorneys' office do not handle many of the cases because the majority of jurisdictions do not have units set up with the requisite training to prosecute these complicated offenses.

The federal government is proclaiming that the slower increase in cases of mortgage fraud is attributable to better reporting and more safeguards to protect the industry. Lending institutions have had a lot to do with fixing the problem by requiring substantial down payments, credit checks, better income verification. The federal government has also assisted in curbing the problem by creating investigative teams such as the Mortgage Fraud Task Force. Many reforms are underway or have already been put in place to fight mortgage fraud. Information sharing and reporting systems are being used to correct the problem. The banks are aware that the previously seen standard types of mortgage fraud will be replaced by more complex schemes in an effort to beat the system.

Surprisingly, Florida has passed Rhode Island as the top state involved with mortgage fraud. Apparently Rhode Island is doing something right as they dropped out of the top ten. Following Florida for the top spots are New York, California, Arizona and Michigan. Eight of the top spots are from the eastern portion of the United States. As Miami and South Florida have become the target for Medicare fraud, they will also continue to be a focal point for real estate fraud. Anyone involved in mortgage fraud should be aware that local, as well as, federal investigators are specifically assigned the task of looking for individuals involved in these types of fraudulent activities. If someone is contacted by local or federal mortgage fraud investigators, they should immediately contact a Miami criminal defense law firm experienced in handling real estate fraud cases. Never speak to law enforcement without being represented by counsel. The majority of mortgage fraud cases are complicated and difficult to prove. Anyone suspected of being involved in a mortgage fraud scheme will only make the case stronger for the prosecution by providing a statement to law enforcement.

The majority of mortgage fraud cases stem from misrepresentations on mortgage applications. The other most popular type of fraud relates to property appraisals. Other cases involve false verifications of deposits, escrow funds or closing costs. In any event, prosecutors are looking to impose harsh sentences on any involved in the aforementioned schemes. If you are being investigated or have been arrested in any one of the frauds mentioned above, it would be in your best interest to hire a lawyer to protect your rights.

Mortgage Fraud Incidents Rise 7% Last Year, The Associated Press, April 26, 2010.
Categories: Fraud
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