Mortgage fraud increases in Third Quarter

Homeowners are facing new fraud issues when it comes to foreclosures on their properties.

New mortgage fraud schemes are on the raise and homeowners are the victims. One of the increases in mortgage fraud is stemming from the sale of homes being foreclosures on. The scheme goes as follows, the homeowner sells to avoid foreclosures however when the proceeds from the lender are distributed to the title company or attorney to pay off the mortgage the funds to pay of mortgage are not sent to the mortgage lender holding the Note on the property.

Another increase in fraud happens when the homeowner signs over the property using a Quit Claim Deed with the intent that the individual the homeowner is signing the property over to will get a mortgage on the property and allow the home owner to stay in the property and pay rent until the homeowner can obtain a mortgage again on the property. What actually happens is the individual who obtains the Quit Claim Deed sells the property to straw buyers and the homeowner ends up receiving a notice of eviction from the lender.

Increases in fraud are also coming from those who claim to be foreclosures specialist. The so called specialist tells the homeowner that they are associated with the lender and ask the homeowner who is in default for money to assist them with a home modification loan. The homeowner agrees for help with the modification, the modification is never done and the homeowner is out the fund they gave to the so called foreclosure specialist.

Increases in credit card fraud are up as well. Fraudsters in this area are using the pretense that they can assist the individual who is default on their credit cards by offering a settlement. The default individual is given a number of options and then the fraudster takes the payment over the telephone or provides the individual with an address as to where to send the monies. The credit card company never receives the money and the victim is still left with the debt.

The Financial Crimes Enforcement Network stated that Mortgage fraud has increased by seven and a half percent in third quarter 2009 as compared to the third quarter of the previous year.

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