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Mortgage fraud increasing despite housing bust

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By SHANNON BEHNKEN | The Tampa Tribune

Published: July 9, 2009

TAMPA - Despite the housing bust – and perhaps because of it – mortgage fraud remains white-hot, and will likely get worse, according to a report released this week by the FBI.

Florida was among the top 10 states where lenders reported problem loans during the 2008 fiscal year. Lenders nationwide reported an estimated loss of $1.4 billion during the year, up 83 percent from the previous year, the report says.

"We're seeing every scheme you could think of," said Dave Couvertier, spokesman for the FBI field office in Tampa.

Reports of suspicious mortgage filings increased 36 percent to 63,700 during the year, compared with 46,700 filings the year before, according to the report.

During the housing boom, mortgage fraud was rampant in states such as Florida, which saw skyrocketing home prices. Back then, a popular fraud in Florida happened when borrowers or others misrepresented loan documents so they could borrow more than the actual sales price and pocket the difference. Often, the home then went into foreclosure.

Now that the market has crashed, the state is ripe for various other types of fraud.

Potential fraud cases reported in 2008 include short sale flips, foreclosure rescue schemes, reverse mortgage fraud and loan modification fraud, according to the report.

Victims range from homeowners to lenders, Couvertier said.

"A lot people may not feel sorry for lenders hurt in this," Couvertier said. "But in the end, it's the regular people that will pay the price one way or another."

As economic conditions worsen, the FBI expects mortgage fraud to increase.

Lenders have already reported more than 41,000 problem loans to the FBI during the 2009 fiscal year, which ends in September, Couvertier said.

Homeowners can obtain more information on mortgage fraud or file a complaint at http://myfloridalegal.com/mortgagefraud, a Web site run by the Florida Attorney General's Office.

Reporter Shannon Behnken can be reached at (813) 259-7804.

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