Mortgage fraud: A risk factor analysis of affected communities

Abstract

Mortgage fraud is a fast-growing form of white-collar crime that has received much press coverage in the United States of America. Mortgage fraud has an adverse effect on individual homeowners, communities, and many indirect victims of the crime. While past research has focused on the personal motivating factors behind the commission of white-collar crime, this particular article reviews several facets of the crime itself and explores the potential neighbourhood risk factors that help attract the crime. From a national perspective, mortgage fraud seems to occur more frequently in neighbourhoods that have low socioeconomic indicators. These associations become even more pronounced when the degree of fraud occurrences within the community is factored in as a variable. Upon disaggregating the data according to region, the fraud indicator variables also display differing trend levels, perhaps indicating that as mortgage fraud practices begin to mature within an area, its community dynamics tend to change as well. The article concludes with recommendations for policymakers, community organizations, and law enforcement officials as to how to address mortgage fraud once it appears within a community, and also addresses future avenues of research for what is largely an untapped area of financial crime research.