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ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
FBI Investigation of Mortgage Fraud
Tuesday, 20 December 2005
How It Impacts You
206 FBI indictments/informations (down from 241 in Fiscal Year 2004). 
170 FBI convictions (consistent with 172 convictions in Fiscal Year 2004) 
$1,014,000,000 (FBI) reported loss (up from $429,000,000 in Fiscal Year 2004

Federal Bureau of Investigation

And How It Impacts You


Believe it or not, this Detroit home sold for $25,000 one day...and $250,000 the next. An extreme makeover? No, an egregious case of mortgage fraud, where the property was illegally "flipped"—bought, falsely appraised at a much higher price, and quickly resold—by a crooked appraiser who's now in jail.

Why should you care? Because these scams not only hurt lending institutions and real estate professionals—and ultimately the health of the U.S. economy—they con significant numbers of homeowners in the U.S. every year. If you're buying property, refinancing a mortgage, or looking for creative ways to eliminate home loans and other debts, you could be a target, too. 

For example 
(and we've seen all this and more in recent cases):

  • You could be offered what seems like an attractive deal—buy a rental property with no money down and get cash kickbacks after the loan closes—but later learn the properties are worthless and get stuck with loans you can't afford to pay.
  • You could get an e-mail promising to eliminate your mortgage loans or credit card debt for an up-front fee, only to pay the money and get nothing in return.
  • If you're having trouble paying your mortgage, you could be approached by scam artists who promise to save your home if you transfer the deed to them and/or pay thousands for a new loan, but they either pocket the fees or remortgage the property and keep the proceeds.
  • You could unknowingly buy a home that's been flipped several times recently, artificially inflating its value.
  • You could provide personal information in response to a "Help Wanted" ad, only to have your identity stolen and used to apply for mortgage loans in your name.

To help educate you on these scams and to outline the steps we're taking to address what has become one of the fastest growing white collar crimes in the nation, the FBI on 12/14 joined with the Department of Housing and Urban Development, the U.S. Postal Inspection Service, the Internal Revenue Service, and the Department of Justice in announcing "Operation Quick Flip."

Together, as part of this effort,we're providing the following resources:

Also see some pictures from recent mortgage fraud cases around the country.

Our top Criminal Investigative Exec Chris Swecker said that many of the cases involve insiders. “It’s either a corrupt appraiser, a corrupt mortgage broker, a corrupt lawyer, a corrupt banker—somebody inside the system has gone bad and is exploiting vulnerabilities in the mortgage application process,” he said. He warned consumers to be alert and to be wary of so-called sure-fire investments.

Resources: National Press Release | Recent California Foreclosure Scam Case


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