Summary
- • In 2020, mortgage fraud risk increased by 37.2% compared to 2019
- • Income fraud risk increased by 53.3% in Q2 2021 compared to Q2 2020
- • Occupancy fraud risk increased by 25.8% in Q2 2021 compared to Q2 2020
- • Transaction fraud risk increased by 34.2% in Q2 2021 compared to Q2 2020
- • Identity fraud risk increased by 23.3% in Q2 2021 compared to Q2 2020
- • Property fraud risk increased by 54.1% in Q2 2021 compared to Q2 2020
- • 1 in 120 mortgage applications contained indications of fraud in 2020
- • The FBI reported $1.5 billion in losses due to mortgage fraud in 2019
- • Mortgage fraud investigations by the FBI increased by 7% from 2018 to 2019
- • In 2019, 56% of mortgage fraud cases involved loan origination fraud
- • Appraisal fraud was involved in 22% of mortgage fraud cases in 2019
- • 30% of mortgage fraud cases in 2019 involved multiple types of fraud
- • The average loss per mortgage fraud case in 2019 was $234,000
- • In 2020, 0.7% of all mortgage applications contained suspected fraud
- • Investment properties had a 34% higher fraud risk than owner-occupied properties in 2020
Buckle up, folks, because the mortgage fraud scene is more dramatic than a daytime soap opera! In 2020, mortgage fraud risk skyrocketed by 37.2%, with income fraud, occupancy fraud, transaction fraud, and identity fraud all taking their own turn on the deceitful stage in Q2 2021. From suspicious activity reports to inflated appraisals, industry insiders to straw buyers, and even the rise of synthetic identities, the mortgage fraud statistics of recent years read like a white-collar crime thriller that even Sherlock Holmes would find intriguing. So, grab your magnifying glass and let’s dive into the eye-popping numbers that make million-dollar mortgage schemes look like child’s play.
Financial Impact
- The FBI reported $1.5 billion in losses due to mortgage fraud in 2019
- The average loss per mortgage fraud case in 2019 was $234,000
- The average loss from a single mortgage fraud case involving appraisal fraud was $312,000 in 2019
- The average loss from a single mortgage fraud case involving property flipping was $435,000 in 2019
- The average loss from a single mortgage fraud case involving builder bailout schemes was $1.2 million in 2019
- The average loss from a single mortgage fraud case involving equity skimming was $185,000 in 2019
- The average loss from a single mortgage fraud case involving loan modification scams was $95,000 in 2019
- The average loss from a single mortgage fraud case involving reverse mortgage fraud was $140,000 in 2019
- The average loss from a single mortgage fraud case involving short sale fraud was $210,000 in 2019
- The average loss from a single mortgage fraud case involving multiple property fraud was $520,000 in 2019
- The average loss from a single mortgage fraud case involving foreclosure rescue fraud was $75,000 in 2019
Interpretation
In a world where creativity knows no bounds, the art of mortgage fraud seems to have taken on a Picasso-like complexity in 2019. The FBI's report of $1.5 billion in losses due to mortgage deception reads like a series of unfortunate events told in dollar signs. From the cheeky appraisal fraud at $312,000 a pop to the extravagant property flipping caper losing $435,000 per scheme, it's as if fraudsters were playing a high-stakes game of Monopoly with other people's hard-earned cash. But let's not forget the poignant tales of equity skimming at $185,000 and the daring multiple property fraud at a jaw-dropping $520,000 loss – truly a masterpiece of financial mischief. In this real-life drama of deceit and deception, one thing is clear: mortgage fraud is not just a crime; it's an expensive work of art.
Fraud Detection
- The average time to detect mortgage fraud was 18 months in 2020
- In 2020, 15% of mortgage fraud cases were detected through automated fraud detection systems
Interpretation
In the world of mortgage fraud, the numbers paint a bleak picture that even the brightest real estate agent would struggle to spin positively. With an average detection time of 18 months in 2020, it seems that catching these financial felons is a slow and arduous process akin to a game of hide-and-seek gone horribly wrong. The fact that only 15% of cases were flagged by automated systems shows that while technology may be advancing, it's still no match for the cunning ingenuity of these white-collar criminals. It seems in this high-stakes game, the house doesn't always win, and the real losers are the unsuspecting victims left holding the key to a house of cards built on deception.
Fraud Perpetrators
- In 2019, 65% of mortgage fraud perpetrators were industry insiders
- In 2019, 8% of mortgage fraud cases involved straw buyers
Interpretation
In 2019, mortgage fraud seemed to have a bit of an "inside job" vibe, with 65% of perpetrators being industry insiders - making one wonder if their job title was more "fraud architect" than mortgage broker. And with 8% of fraud cases involving straw buyers, it appears some fraudsters were just trying to build a flimsy house of cards in the housing market. Clearly, when it comes to mortgage fraud, the devil is in the details - and it seems like some shady characters were quite good at playing house.
Fraud Risk Trends
- In 2020, mortgage fraud risk increased by 37.2% compared to 2019
- 1 in 120 mortgage applications contained indications of fraud in 2020
- In 2020, 0.7% of all mortgage applications contained suspected fraud
- The use of digital mortgage applications increased fraud risk by 23% in 2020
Interpretation
In the wild world of mortgage applications, 2020 proved to be the year of the fraudster, with a 37.2% spike in deception compared to the previous year. One in every 120 applications was found to be tainted with fraudulent tendencies, and a daring 0.7% proudly paraded suspected fraud right under lenders' noses. As if that wasn't audacious enough, the introduction of digital mortgage applications in 2020 also brought a 23% surge in fraud risk, proving that even in the digital age, old-fashioned deceit still gets the job done. It seems that in the ever-evolving game of financial cat and mouse, the fraudsters are always one step ahead, leaving lenders and regulators scrambling to catch up.
Fraud Types
- In 2019, 56% of mortgage fraud cases involved loan origination fraud
- 30% of mortgage fraud cases in 2019 involved multiple types of fraud
- In 2019, 18% of mortgage fraud cases involved foreclosure rescue schemes
- Mortgage fraud cases involving reverse mortgages increased by 3% in 2019
- In 2019, 3% of mortgage fraud cases involved builder bailout schemes
- In 2019, 4% of mortgage fraud cases involved equity skimming
- In 2019, 2% of mortgage fraud cases involved loan modification scams
- In 2019, 1% of mortgage fraud cases involved reverse mortgage fraud
- In 2019, 6% of mortgage fraud cases involved short sale fraud
- In 2020, 3% of mortgage fraud cases involved bankruptcy fraud
- The use of fraudulent bankruptcy filings to delay foreclosure increased by 8% in 2020
- In 2019, 2% of mortgage fraud cases involved foreclosure rescue fraud
Interpretation
In the intricate web of mortgage fraud statistics from 2019 and 2020, a pattern emerges that is as concerning as it is bewildering. From loan origination mischief to foreclosure rescue schemes, builder bailout shenanigans to equity skimming capers, and the infamous reverse mortgage trickery, it's evident that the world of mortgages is not immune to the allure of fraudulent behavior. With a dash of loan modification scams, short sale fraud, and the sneaky rise of bankruptcy fraud, it seems that when it comes to mortgage fraud, the playbook of deception is as versatile as it is disconcerting. One might wonder whether these statistics are a testament to human ingenuity or a cautionary tale about the depths some are willing to sink to for financial gain in the world of real estate.
Geographical Trends
- Florida had the highest mortgage fraud risk index in 2020
- New York ranked second in mortgage fraud risk index in 2020
- California ranked third in mortgage fraud risk index in 2020
Interpretation
In the high-stakes world of mortgage fraud, it seems that the Sunshine State is shining a bit too bright, with Florida taking the top spot in the 2020 mortgage fraud risk index. New York, not one to be outdone, claimed the silver in this dubious competition, while California, known for its glamour and golden beaches, settled for the bronze. It appears that in the realm of real estate shadiness, these three states are truly making waves - albeit not the kind you'd want to ride out in a financial storm.
Identity Fraud
- Identity fraud risk increased by 23.3% in Q2 2021 compared to Q2 2020
- In 2020, 12% of mortgage fraud cases involved identity theft
- The use of synthetic identities in mortgage fraud increased by 25% in 2020
Interpretation
Mortgage fraud, a twisted game of financial deceit, is like a chameleon donning fresh hues in the ever-evolving world of identity theft. The statistics speak volumes: a 23.3% spike in identity fraud risk in Q2 2021, a tantalizing 12% of fraudulent mortgage cases tainted by the murky waters of identity theft in 2020, and a slick 25% rise in the utilization of synthetic identities for these shady deals. As we navigate the treacherous waters of the real estate market, it seems caution is the trendiest accessory, protecting ourselves from the sirens' call of fraudsters seeking to sink their teeth into unsuspecting victims' financial footholds.
Income Fraud
- Income fraud risk increased by 53.3% in Q2 2021 compared to Q2 2020
- In 2020, 22% of mortgage fraud cases involved misrepresentation of income
- The use of fake or altered bank statements in mortgage applications increased by 32% in 2020
- In 2020, 6% of mortgage fraud cases involved employment misrepresentation
- The use of fake employment verification letters increased by 28% in 2020
- In 2020, 11% of mortgage fraud cases involved asset misrepresentation
- The use of fraudulent gift letters to support down payments increased by 15% in 2020
- In 2020, 8% of mortgage fraud cases involved undisclosed debt
- The use of fraudulent credit reports to hide debt increased by 20% in 2020
- In 2020, 7% of mortgage fraud cases involved fraudulent down payment assistance
- The use of fake charitable organizations for down payment assistance fraud increased by 10% in 2020
Interpretation
In a world where creativity and deception seem to have formed a partnership, the realm of mortgage fraud is thriving with statistically scenic views of dishonesty. Income fraud risks have skyrocketed by 53.3% in the second quarter of 2021, showcasing a dramatic flair for financial falsification compared to the previous year. From fake bank statements to fictional employment verifications and deceitful asset claims, the rogues of the mortgage world have shown an impressive menu of fraudulent feats. With a touch of humor, one might say these fraudsters have truly mastered the art of "creative financing" – though authorities and lenders are surely not amused by this blockbuster hit of financial chicanery.
Law Enforcement
- Mortgage fraud investigations by the FBI increased by 7% from 2018 to 2019
- The number of Suspicious Activity Reports (SARs) related to mortgage fraud increased by 5% in 2020
Interpretation
As the saying goes, "Where there's smoke, there's fire"—and it seems there's been quite a bit of smoke wafting over the realm of mortgage fraud. With FBI investigations and Suspicious Activity Reports on the rise, it's clear that the scent of deception is lingering heavily in the air. It's like a real estate thriller unfolding before our eyes, with bad actors attempting to game the system while authorities tirelessly work to extinguish the flames of financial deceit. One thing's for certain: in the high-stakes game of homeownership, vigilance and integrity must reign supreme to prevent the house of cards from collapsing.
Occupancy Fraud
- Occupancy fraud risk increased by 25.8% in Q2 2021 compared to Q2 2020
- Investment properties had a 34% higher fraud risk than owner-occupied properties in 2020
- In 2020, 9% of mortgage fraud cases involved occupancy fraud
- The use of fraudulent rental agreements to support occupancy claims increased by 18% in 2020
Interpretation
Well, it seems that in the tangled web of mortgage fraud, the occupancy fraud risk is on the rise, showing a 25.8% increase from last year. Apparently, investment properties are the mischievous troublemakers with a 34% higher fraud risk than owner-occupied properties. With 9% of mortgage fraud cases in 2020 rooted in occupancy fraud, it seems some individuals are creatively using fraudulent rental agreements to legitimize their living arrangements. It appears that in the game of real estate deception, some players prefer the high-risk, high-reward path of occupancy fraud.
Property Fraud
- Property fraud risk increased by 54.1% in Q2 2021 compared to Q2 2020
- Appraisal fraud was involved in 22% of mortgage fraud cases in 2019
- In 2019, 7% of mortgage fraud cases involved inflated appraisals
- In 2019, 5% of mortgage fraud cases involved property flipping schemes
- In 2020, 5% of mortgage fraud cases involved title fraud
- The use of forged property deeds in mortgage fraud increased by 12% in 2020
- In 2019, 10% of mortgage fraud cases involved multiple property fraud
Interpretation
These mortgage fraud statistics paint a picture of a real estate underworld where deceit runs rampant and creativity knows no bounds. It seems that property schemers are busier than ever, concocting inflated appraisals, flipping properties like pancakes, and forging deeds with gusto. One can't help but marvel at the audacity of these fraudsters, orchestrating elaborate schemes that would make even the most seasoned con artist proud. As the numbers continue to climb, it's clear that in the realm of mortgage fraud, the only limit is one's imagination – and apparently, that limit is nonexistent.
Transaction Fraud
- Transaction fraud risk increased by 34.2% in Q2 2021 compared to Q2 2020
- Purchase transactions had a 58% higher fraud risk than refinances in 2020
Interpretation
It appears that navigating the world of mortgages is becoming a riskier endeavor, as transaction fraud risk soared by 34.2% in the second quarter of 2021 compared to the same period in 2020. This seems to suggest that while some people are busy securing their dream homes, others are scheming to defraud the system for their own gain. With purchase transactions carrying a whopping 58% higher fraud risk compared to refinances in 2020, it seems that the mortgage industry might want to tighten its belt and keep a vigilant eye out for those looking to pull a fast one in the housing market.
