Paper Street Investment Group » Mortgage Fraud

Foreclosure Scams on the Rise

Ross — Wed, 16 Jan 2008 20:14:22 +0000

You may have seen the press about the dramatic rise in mortgage delinquencies. With the upcoming wave of ARM resets in March, the delinquencies and eventual foreclosures will only continue to rise. Just as we saw scam artists promoting “flipping” during the rise of the real estate bubble, we’re now seeing more scams related to foreclosures. Below are just a few articles and resources:

Freddie Mac has a foreclosure fraud center and commercial on Youtube.
Fraud Guides has a bulleted list of red flags.
10/25/07: Bankrate elaborates on various schemes. They’ve provided a summary of warning signs.
12/7/06: CNN posts an update to the ongoing issue.
11/29/06: WSJ’s take.
7/7/05: The BBB issued a recent warning on foreclosure scams.
6/3/05: The Washington Post covers foreclosure fraud.
10/1/98: The DOJ issued a notice detailing how to detect foreclosure fraud.

How can you differentiate between a legitimate and fraudulent deal? Below are some opinions:

11/2/07: Jim Watkins is emphasizing the importance of full disclosure and participation of all parties.

Mortgage Fraud & Credit Bubble – Collected Reference Material

Ross — Wed, 16 Jan 2008 07:23:59 +0000

This post is an ongoing collection of articles, surveys, and research about mortgage fraud and the credit bubble.

General References:

Rachel Dollar’s and the Prieston Group’s blogs focus on mortgage fraud.
John Maudlin publishes my favorite investing and economic analysis newsletter. He’s had some great discussion of the credit bubble, sub-prime crisis, and mortgage fraud.
Efinancedirectory.com has a great segment on the housing bubble. I’ve been reading them for several years. They liberally quote from credible sources such as Credit-Suisse.
Patrick.net is a great resource for housing information specific to the Bay Area, CA.

Specific References:

Read about mortgage fraud in Miami condos.
The BBC has a great article with graphical explanations of the subprime mess.
The FBI’s most recent mortgage fraud report was issued in 2006. There’s a shorter article specific to mortgage fraud updated on 5/2007.
Countrywide underwriters sued by NY pension funds for mortage fraud.
FBI opens investigation into 14 banks related to possible mortgage and securities fraud.