Subprime Mortgage Loan Scams

Posted By Team iBizExpert On February 15, 2022 04:12 AM Hits: 79

Imagine getting the house of your dreams. Even though your credit isn't great, you get a subprime loan with an adjustable rate mortgage. After a few years, the interest rates go up, making it impossible for you to pay. You see an ad for a business that wants to help. In exchange for a small monthly fee, the business will pay your mortgage while you get back on your feet. But here's the bad news: it's all a trick. Con artists just take your money and run...

It's just one of the newest scams and schemes that are happening in the financial services industry right now.

These cons, which involve a lot of tricks with mortgages and subprime loans, cost the country tens of billions of dollars every year.

This subprime mess affects a lot of people who own their own homes. The Federal Reserve is trying to help the mortgage loan companies by stepping in. Criminal charges could be brought against these companies for making up records, lending money to people who didn't qualify, and not telling investors the truth.

All of these are good reasons why the US government is putting a lot of effort into cracking down on the biggest of these financial crimes. They are doing this by starting proactive programmes and changing their resources as trends become clear. They are also doing this while working with a wide range of government and private sector partners.

Investigators are looking into mortgage companies and investment problems right now.

As part of our Subprime Mortgage Industry Fraud Initiative, which began last year, the government is looking into 14 companies that lend money to people who don't have good credit.

The companies come from all over the financial services industry, from mortgage lenders to investment banks that bundle loans into securities that are sold to investors. They are also looking into whether any executives traded on inside information.

Traditional mortgage fraud:

More than 1,200 cases are opened today in one state alone, which is about 40 percent more than this time last year. Most of these cases involve fraud to make money, where groups of straw buyers, realtors, etc. set up schemes to buy properties that are then sold or let go into foreclosure.

California, Texas, Arizona, Florida, Ohio, Michigan, and Utah are all hotspots.

The number of "suspicious activity reports" we look at for possible mortgage fraud has grown from 3,000 in 2003 to 48,000 in 2007. This year, they expect to get more than 60,000 reports like this.

A recent case: In November, the owners of a Minnesota homebuilding company called Parish Marketing, along with a bank officer, a closing agent, and others, pleaded guilty to a $100 million mortgage scheme involving about 200 homes.

If you were hurt by the subprime mortgage madness, talk to your bank and find out if there are any programmes that can help.

Tags/Keywords: mortgage, financial, fraud, companies, government, subprime, year, industry, financial services, services industry

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