Aneesa Castaneda
Ms. Stephenson
English 104
6 May 2009
What Has Caused the Increase in Mortgage Fraud?
Throughout history, the economy has always fluctuated by having periods of highs and lows. When the economy is in a high or low period, it has shown to bring about criminal acts. This connection is true with the housing market and mortgage fraud. According to the FBI, “mortgage fraud is defined as the intentional misstatement, misrepresentation, or omission by an applicant or other interested parties, relied on by a lender or underwriter to provide funding for, to purchase, or to insure a mortgage loan” (US par. 8). Since the bust of the major mortgage companies, including Fannie Mae, Lehman Brothers and Bear Stearns, the economy has been in a downward spiral, and since then, there has been an increase in the number of fraud cases being tried in local and higher courts. It has increased so much to the point that the FBI “has formed more than 40 mortgage fraud task forces nationwide [to handle all of the] related cases” (Thompson par. 9). Figure 1 demonstrates this increase, showing “FBI mortgage fraud investigations at the end of FY [fiscal year] 2007 total[ing] 1,204, a 47% increase from FY 2006 and a 176% increase from FY 2003” (US par. 24). It has become so widespread that “it touches those who know its occurring and those who don’t even suspect it” (Mortgage par. 39). Don Thompson of the Associated Press and the FBI write that mortgage fraud is the main contributor to the current financial crisis. They also suggest that a declining economy brings about more crimes associated with mortgages and many will take advantage of the weaker market to gain an increase in profit or property. There are other researchers that believe that booming housing economy during the 1990’s to 2000’s that brought down the economy into its current state, or by those who are inside the industry itself. The state of the housing market cannot be linked to any... [continues]
Ms. Stephenson
English 104
6 May 2009
What Has Caused the Increase in Mortgage Fraud?
Throughout history, the economy has always fluctuated by having periods of highs and lows. When the economy is in a high or low period, it has shown to bring about criminal acts. This connection is true with the housing market and mortgage fraud. According to the FBI, “mortgage fraud is defined as the intentional misstatement, misrepresentation, or omission by an applicant or other interested parties, relied on by a lender or underwriter to provide funding for, to purchase, or to insure a mortgage loan” (US par. 8). Since the bust of the major mortgage companies, including Fannie Mae, Lehman Brothers and Bear Stearns, the economy has been in a downward spiral, and since then, there has been an increase in the number of fraud cases being tried in local and higher courts. It has increased so much to the point that the FBI “has formed more than 40 mortgage fraud task forces nationwide [to handle all of the] related cases” (Thompson par. 9). Figure 1 demonstrates this increase, showing “FBI mortgage fraud investigations at the end of FY [fiscal year] 2007 total[ing] 1,204, a 47% increase from FY 2006 and a 176% increase from FY 2003” (US par. 24). It has become so widespread that “it touches those who know its occurring and those who don’t even suspect it” (Mortgage par. 39). Don Thompson of the Associated Press and the FBI write that mortgage fraud is the main contributor to the current financial crisis. They also suggest that a declining economy brings about more crimes associated with mortgages and many will take advantage of the weaker market to gain an increase in profit or property. There are other researchers that believe that booming housing economy during the 1990’s to 2000’s that brought down the economy into its current state, or by those who are inside the industry itself. The state of the housing market cannot be linked to any... [continues]
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