WASHINGTON -- Mortgage fraud is rife in the depressed housing market, with perpetrators motivated by high profits and little risk of getting caught, the FBI said Friday.
The agency's annual report on mortgage fraud said such schemes are particularly hard to discover and their total cost is unknown.
Real estate firm CoreLogic says more than $10 billion in loans were made with fraudulent application data in 2010, the report noted.
Fraud last year stayed at 2009 levels as the market remained in distress, providing ample opportunity for scams, the report said. It predicted that perpetrators would "continue to seek new methods to circumvent loopholes and gaps in the mortgage lending market."
"These methods will likely remain effective in the near term, as the housing market is anticipated to remain stagnant through 2011," the FBI said. Officials said the bureau's probes rose 12 percent last year over 2009, officials said.
The most prevalent schemes involve falsifying financial information to qualify buyers who otherwise would be ineligible for a loan. Other crimes involve inflated appraisals, including schemes that use dishonest appraisals to sell homes at elevated prices. Some get-rich-quick schemes persuade investors that if they buy rental property or land, the price will appreciate swiftly.
The FBI says the crimes are committed by licensed and unlicensed brokers, loan officers, real estate agents, appraisers, and other industry insiders as well as organized crime groups, the report said.
"Mortgage fraud enables perpetrators to earn high profits through illicit activity that poses a relative low risk for discovery," the FBI said.
Michigan was among the top states for mortgage fraud last year. Others were California, Florida, New York, Illinois, Nevada, Arizona, Texas, Georgia, Maryland, and New Jersey, the FBI reported.
The agency said it is dedicating resources to fight the threat, including an operation that started in 2010 and targets mortgage fraud nationwide.
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