Mortgage fraud finds new outlet
Borrowers inflate income, assets
Fewer borrowers are lying on their mortgage applications, but the remaining few are raising the stakes and pulling off a more dangerous scam. Rather than inflate their home prices, borrowers are inflating their incomes and assets. Per CNBC:
"The bubble markets of old, the lax lending practices, were making it a lot easier to perpetrate fraud. On a no-doc loan you didn't need to prove anything. Clearly that shifted to a much tighter underwriting standard environment," said Fleming.
Overall, mortgage fraud was down 5.6% in the second quarter from a year earlier, although it is up slightly quarter to quarter, according to CoreLogic. Fraudulent residential mortgage loan applications totaled an estimated $5.3 billion nationally in Q2, down from $5.5 billion a year earlier. That is still less than 1% of home loan applications.