It’s no secret that South Florida’s housing market was one that was hit hardest when the economy collapsed. Aside from tourism, real estate was one of the main economic support systems for the area. Now, the Palm Beach Post is reporting that Florida leads the country in mortgage fraud cases, with more than $144M in suspect loans being questioned in court.
Despite the horror stories you’ve heard about Las Vegas’ dismal housing market, Florida retains the lead in the nation for mortgage fraud litigation through September as millions of dollars in bad boom-time loans continue to be discovered by law enforcement and lenders.” Industry publication Mortgage Daily released a report Tuesday showing that Florida’s activity during the third quarter included over $144 million in suspect loans that were questioned in court.
Mortgage Daily founder and publisher Sam Garcia attributed some of today’s fraud cases to the real estate crash in 2008, noting that investors continue to put pressure on banks to buy back mortgages that did not meet underwriting standards or were bogus for other reasons. Buybacks from banks then cause a domino effect, as larger banks then turn to loan originators or smaller companies to hold someone accountable, says Garcia. “For a long time there just wasn’t much prosecution,” Garcia said. “Then we were just inundated. People who had committed fraud could no longer cover it up when the market turned bad and it became clear that loans were made that shouldn’t have been made.”
The consequences of irresponsible mortgage lending are still being felt today, and there isn’t much hope for recovery in the very near future. “Nationwide, the mortgage fraud index climbed 16 percent in the third quarter, compared with the same time in 2010, with cases totaling more than $1.3 billion in questionable loans,” reports the Palm Beach Post. “The five states with the worst index ranking were, in order: Florida, California, Minnesota, New York and Texas.”
If you are in need of fraud investigation services, contact Contego Services Group today. Under the leadership of Linda Webb, The Fraud Dog, Contego has the knowledge and expertise to help you resolve your fraud case. Whether it’s mortgage fraud, insurance fraud, workers compensation fraud or any other type of fraudulent activity, Contego and The Fraud Dog will work together to help you and your company. For more information, call 1-855-WE-SWARM today.