The much greater losses to ID fraud should not surprise anyone who has followed the financial industry with any attention -- after all, a substantial amount of all financial crime, including mortgage fraud, comes from false identity documents presented by the fraudsters involved in a transaction. A loan application taken out by a fraudster using a stolen identity counts for both an ID theft and mortgage fraud; thus, there is a lot of overlap
In continuing our September Mortgage Fraud spotlight, this week we are talking about the government regulation of identity verification. We know already how unscrupulous fraudsters recruit straw buyers, forge identification documents and walk away with hundreds of thousands of dollars in proceeds. For the loaning institutions this, however, is just the beginning of their troubles. After reporting the loss, they have to face an investigation by the government's Financial Crimes Enforcement Network, as well as by various other federal and state financial regulators. Fines approaching $25,000 or more frequently await the institutions at the end of these investigations.
For anyone concerned about how mortgage fraud can affect them specifically, the LexisNexis Mortgage Asset Research Institute has recently released their periodic "Mortgage Fraud Case Report", which details the fraud trends both in type and geographic region.
Mortgage fraud has been much in the news in recent years. After the dust created by the mortgage-fueled financial crisis of 2007-2008 began to clear, scrutiny of the mortgage-industry revealed extraordinary levels of fraud. This excerpt from the FBI’s Financial Crimes Report, 2008:
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