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Mortgage fraud is on the rise again
By Lauren | August 23, 2010
Well, this is depressing … The Wall Street Journal reported today that mortgage fraud is once again on the rise, less than two years after the international financial meltdown. As you’ll recall, recession set in, world financial markets tumbled, home values plummeted, and unemployment skyrocketed when it was discovered that Wall Street investment firms had gambled billions on subprime mortgages. Allegations of mortgage fraud from 2008 still haven’t been fully investigated and prosecuted, yet here we are again.
When are we going to learn?
The Journal reports that the compliance measures that were put into place after the 2008 meltdown didn’t prevent fraud for long. In response, swindlers have simply developed more sophisticated scams. Frauds related to falsified credit reports have declined, but appraisal frauds (claiming a property appraised for more than its value in order to justify a higher loan amount) are on the rise, and application frauds are holding steady.
Someone who’s truly determined to game a system can almost always come up with a new way to do it, and writing another layer of regulations to try to prevent misconduct is all too likely to be a waste of time, energy, paper, and ink. To prevent fraud, what’s really needed is timely, effective enforcement of existing laws by regulatory agencies. It’s long since time our legislators stopped tweaking the mortgage rules and, instead, gave the agencies who are responsible for punishing mortgage fraud the necessary resources to do so.
To read the Journal article, click here.
Topics: Business Ethics |