In Florida and across the country, prosecutors are bringing more criminal cases against people suspected of committing mortgage fraud. Mortgage fraud can be committed in a number of ways. Some examples include: buyers using fake identities to obtain loans and purchases houses, using fraudulent appraisals to inflate the price of a house so it can be resold at an artificially high price, paying bribes or kickbacks to get mortgages approved and forging mortgage documents (i.e. falsifying a buyer’s income to make it appear that he/she is able to afford a higher mortgage) to get a mortgage approved.
When mortgage fraud is committed, houses are sold to people who would not be able to afford them under normal circumstances, and housing prices become artificially inflated. The result is that ultimately mortgages are not paid and there are numerous foreclosures which can crash the housing market. A crashing housing market affects most homeowners, not just the ones who obtained their home by fraudulent means. Another result is that mortgages become much harder to get for everyone, which of course negatively affects the sale of homes and further drags down the housing market.
The United States Justice Department has formed more than 40 mortgage fraud task forces across the country, and federal mortgage fraud cases have more than doubled over the last few years, according to an article at www.Sfgate.com. In that time period, it is estimated that mortgage lenders have lost approximately $4 billion. Florida and Georgia are among the states with the highest foreclosure rates. Florida and two other states have half of the country’s mortgage fraud complaints over the last few years.