A new report by Tower Group, a research firm focusing on the global financial services industry, warns that losses from mortgage fraud will reach $2.5 billion in 2008, with comparable losses continuing in future years.
According to Tower Group, “Falling home prices and inappropriate mortgage underwriting have grabbed the headlines and much of the blame for mortgage credit woes in recent months. But the significant rise in mortgage fraud over the past 10 years is another important trend.”
“Mortgage fraud is difficult to track and takes many forms – for example, fraudsters cheating borrowers out of their properties with false promises of foreclosure avoidance or using the identity of a real person (often without his or her knowledge) to fraudulently purchase one or more properties.”
We think that the Tower Group figure of $2.5 billion falls far short of the mark.
When the federal government finally decides how it is going to help bailout homeowners — and we’re sure that it will, no matter who is elected president in November – it will create even greater opportunities for fraud.
Once the government puts billions of dollars up for homeowners facing foreclosure, the mortgage scammers will come crawling out of the woodwork to take advantage of the program.
They’re probably already working on the details…