Commentary: Mortgage Fraud: It's a White Collar Hold Up

Summary

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Rochester enjoys a dubious distinction. We were ahead of the curve on mortgage fraud. Over a decade ago the Amicos were already working on their $60 million fraud conspiracy. That was well before sub-prime mortgages caused the spike in mortgage fraud that we're seeing now.

What exactly is mortgage fraud? Anyone who obtains a mortgage, or helps someone else obtain a mortgage by misrepresenting facts has committed mortgage fraud. Why is it so huge? There are all these fees and commissions for the property appraiser, the mortgage broker, loan officers, and the attorneys. The housing bubble created increased demand for mortgages and increased pressure to shorten the process. Non-traditional loans were introduced with fewer quality control constraints. It's tempting to approve loans that you should not if you are paid a commission for doing so.

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Extract

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Commentary: Mortgage Fraud: It's a White Collar Hold Up

It's not just paying inappropriate fees and commissions. There are many variations on mortgage fraud. The most common scheme is illegal property flipping which works like this:

* a property flipper buys a property for...

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