Aimed at Title, Insurance and Mortgage Industries as well as Local, State and Federal Law Enforcement Agencies seeking proactive solutions to Mortgage and Real Estate Fraud.    

Salt Lake City, UT/ December 16, 2005/ Press Release/ -- In corner offices that overlook busy city skylines, top banking officials across the country are seeking solutions to industry-wide problems stemming from mortgage fraud.  For years the mortgage banking industry has relied upon the success formula of borrow short, lend long and pocket the spread, but as anyone with an ear to the ground could tell you those days are over.   

Reactive risk management within the banking world is alive and well again as banks daily seek to remove active mortgage fraud loan exposure from the balance sheets.  In review of loans many financial institutions are learning that they have not done well in insulating themselves or their portfolios from the risk factors.  

The shock and awe of mortgage fraud has led many financial institutions to reconcentrate the fraud elsewhere within the financial system.  A trigger mechanism that Perfect Home Living’s CEO, Sheri Fitzpatrick, says, “[Mortgage Fraud] is certainly a catalyst for not a housing bubble but for a stock market bubble as Wall Street investors funnel these bad loans to investors in mortgage-backed securities.”   

But on Wednesday, December 14, 2005, a new chapter in the war on Mortgage Fraud has emerged.  The FBI along with the Housing and Urban Development Office of Inspector General, Internal Revenue Service, the U.S. Postal Inspection Service and the Department of Justice announced the results of an ongoing initiative to combat the growing epidemic of mortgage fraud. 

Operation Quick Flip – a term first coined by the FBI has been designed to show that federal law enforcement recognizes the mortgage fraud threat. The Federal Bureau of Investigation Criminal Investigative Division (CID), the Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG), the United States Postal Inspection Service (USPS), the Internal Revenue Service (IRS), and the Department of Justice (DOJ) have participated in this case round-up to provide information to the public regarding the federal government's efforts to combat mortgage fraud.  The overall goal for federal agencies involved is to target mortgage fraud groups for the purpose to disrupt and dismantle them permanently.

The complexities of understanding mortgage fraud can be as indifferent as the criminal element that’s involved in committing the act.  However according to the FBI, mortgage fraud is defined as a material misstatement, misrepresentation, or omissions relied upon by an underwriter or lender to fund, purchase, or insure a loan.

Federal law enforcement is working with state and local law enforcement, regulators, and the financial institution industry to combat the problem. OFHEO (Office of Federal Housing Enterprise Oversight) has passed a regulation requiring Freddie Mac and Fannie Mae to report suspicious mortgage fraud activity on a Mortgage Incident Notice (MFIN). FBI, OFHEO, and FinCEN (Financial Crimes Enforcement Network) are working to establish a reporting device similar to the banking industry's Suspicious Activity Report. This is in progress, but will likely take some time as regulations and possibly legislation will have to be passed. The FBI, HUD-OIG, USPS, and IRS conduct criminal investigations into Mortgage Fraud Activity with a goal of disrupting and dismantling mortgage fraud rings.

Its reported from July 5, 2005, until October 27, 2005, the FBI, HUD-OIG, USPS, IRS, in coordination with the DOJ, indicted 156 mortgage fraud subjects. A total of 81 arrests were made. A total of 89 convictions were obtained, and 60 subjects were sentenced during this time frame. The combined loss to the industry by the above-subjects is $606,830,604.

For fiscal year 2005, the following stats are:

-  21,994 SARs were filed (up from 17,127 in Fiscal Year 2004).
-  721 pending FBI Mortgage Fraud cases (up from 534 in Fiscal Year 2004).
-  1,020 pending HUD-OIG Mortgage Fraud cases (up from 920 in Fiscal Year 2004).
-  206 FBI indictments/informations (down from 241 in Fiscal Year 2004).
-  170 FBI convictions (consistent with 172 convictions in Fiscal Year 2004) -          $1,014,000,000 (FBI) reported loss (up from $429,000,000 in Fiscal Year 2004).

The hot spots for Mortgage Fraud activity in 2004 as reported by the FBI (per capita) were: California, Nevada, Utah, Arizona, Colorado, Missouri, Illinois, Maryland, Georgia, and Florida.
 

About Perfect Home Living 

Perfect Home Living assists in implementing programs and providing training to financial lenders as well as educating Utah's consumers and licensed professionals to red flags within Utah's real estate market.   For more information or to request assistance please visit us online at:  http://www.PerfectHomeLiving.com