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Real Estate The Ticker

Mortgage fraud finds new outlet

Borrowers inflate income, assets

magnifying glass

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.

Source: CNBC
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