Mortgage fraud flourishes in down markets
current real estate market conditions provide an excellent backdrop for mortgage
- Buyers trying to get into the
market before interest rates climb much higher
are tempted to cheat to get what they want.
- Those same rising rates create
financial woes for homeowners with adjustable
rate mortgages who may be enticed to bend
the rules to get out of a bad situation.
- Sellers unable to find ready
and financially able buyers may be the unwitting targets of fraudsters who offer
them a way out.
As long as the market stays in the doldrums,
mortgage fraud will continue to thrive, say experts. It can creep into any neighborhood
and hurts not only buyers, sellers and lenders, but even neighbors.
Ann Fulmer learned all about it when she found it in her Atlanta neighborhood.
She knew something was fishy when she started noticing unusual activity nearby.
The real estate market in her area had been stagnant for awhile before the 1996
Olympics, says Fulmer. Houses had been on the market for a while with reduced
Suddenly, houses were bought and resold in a day for
$150,000, $200,000 or even $300,000 more than the asking price. Then she started
noticing that the people who had paid half a million dollars for a house were
showing up "driving 1972 Pintos and (with) everything they owned in Hefty
bags." Other houses that were sold were never occupied.
A former radio news reporter and criminal prosecutor, Fulmer may have looked like
any other stay-at-home mom, but for the mortgage fraudsters preying on her neighborhood,
she became their worst nightmare. Bewildered, she started poking around. "I
spent mornings while my kids were at Mommy's Day Out down at the courthouse,"
she says. "I started to see the same name on the deeds."
What she found was mortgage fraud.