Mortgage Fraud Research Articles

Subprime Mortgage Tremors: An International Issue

The subprime mortgage crisis has negatively affected individuals, investors, lenders, and economies worldwide. This paper first examines contributing factors of the crisis: predatory lending, predatory borrowing and mortgage fraud, unethical practices, unregulated mortgage brokers, off-balance-sheet activity, and the infusion of capital from Asia that provided the fuel for subprime mortgage activity to continue. International markets have both suffered from and contributed to the crisis. Legislation that has been enacted or recommended in the U.S. and the European Union is reviewed. We then make recommendations which could begin to restore confidence of consumers and investors worldwide; however, it is clear that laws and regulations must be enacted quickly to correct the situation and bring stability to investment markets.

Disentangling the Differences between Abusive and Predatory Lending: Professionals’ Perspectives

This study describes how mortgage professionals differentiate abusive from predatory lending. Data were analyzed qualitatively. The results indicate that some users of this term do not always adhere to a strict definition of predatory lending but rather use it as a term for any general mortgage abuse and mortgage fraud. Existing laws at the federal‐ and state‐level curtail abusive lending and promote fairness in the market place and they are highly enforced among depository financial institutions. However, unregulated nonfinancial institutions, mortgage brokers, and originators are still a primary source of predatory lending.

Mortgage fraud and organized crime in Canada: strategic intelligence brief

Natasha Tusikov, Acting Manager, National Research and Methodology Development Unit, Criminal Intelligence Service Canada - Central Bureau, Intelligence Analysis and Knowledge Development Branch, November 2007 http://www.cisc.gc.ca/products_services/mortgage_fraud/document/mortgage_e.pdf

Buyers' Propensity-to-Buy in the Housing Industry

This article: 1) develops new psychological theories and mathematical models that can explain many of the legal and economic problems that occurred in the US housing industry between 2000 and the present - such as the sub-prime loan problems, predatory lending, mortgage fraud, title defects, rapid/un-warranted price increases and sales fraud; 2) analyzes and identifies the psychological and behavioral biases of first-time homebuyers and repeat home buyers, 3) develop new theories (testable hypothesis) of psychological effects and Biases inherent in the housing purchase/sale process; 4) introduces new theoretical mathematical models for Buyers' Propensity-To-Purchase. This study involves analysis of historical economic trends, critique of existing methods and theories, and development of new theories and development of mathematical models. This article also partly relies on surveys and published empirical research using US macroeconomic and housing data from the 1995-2003 period. At the present time, the models developed in this article cannot be realistically tested empirically because real estate data and price series and psychological effects described in the models (and associated periodic changes in such data or the logarithms of such data) don't fit known distributions and regression techniques.

Mortal dangers, moral hazard and mortgage lending by solicitors: an international perspective

Reviews the regulation of solicitors; in the UK this is self‐regulation by the Law Society. Discusses the widespread provision of financial services to clients by their solicitors, and legal cases in the UK and Australia that exemplify the mortal dangers involved in mortgage fraud and involve the Solicitors Disciplinary Tribunal; these involved misappropriation and secret profits, excessive loans, failure to keep clients informed, and close association between solicitor and borrower. Mentions the Hodgson Report in Australia, which in 2002 commented on such problems. Moves on to the S&L insolvency scandal in the USA after deregulation in 1982, and finds parallels with the UK solicitor mortgage investment schemes, even though the US schemes were run by financial institutions with their own regulators. Concludes that mortgage investment schemes must be closely regulated so that investors know the true cost of loans and any profits taken by the lawyer.

Mortgage Fraud Prevention Program: Volunteer Legal Services Program of the Bar Association of San Francisco

ABSTRACT The Volunteer Legal Services Program of the Bar Association of San Francisco to address home equity fraud against older persons is described. Legal conditions that constitute mortage fraud are explained, and a two pronged approach to stopping home loss is presented.

Mortgage Fraud and the Law of Theft

Mortgage Fraud and the Law of Theft

Fraudulent Arson: Operation Nero and Beyond

The scries of trials arising out of the Metropolitan Police investigation into arson and other insurance frauds under the name Operation Nero concluded in early 1998. The central figure was loss assessor Peter Scott, who was convicted, along with various associates, at two trials in 1996 and 1997 for a number of offences going back to the early 1990s. He received three years' imprisonment for several offences of conspiring to defraud involving bogus burglaries, and another assessor and a jeweller who provided fake valuations received one year each. He was then sentenced to seven years, to run consecutively with his earlier sentence, for organising the arson of a clothing warehouse in the East End of London, and a further five years on charges of conspiracy to defraud insurers, to run concurrently. The owner of the warehouse also received seven years, and three co‐conspirators who rented space in the warehouse received three‐year sentences. A number of other co‐conspirators gave evidence for the Crown. Scott was acquitted in a further trial where he was accused of a £400,000 mortgage fraud which police described as complex and clever. The value of the fraudulent arson at the warehouse was £5m and the police estimated that Scott was responsible for at least £30m of insurance claims, half of them settled by the time his business was raided and records siezed in 1992.

‘Obtaining property by deception’, mortgage fraud and funds transfer

The appellants had made mortgage applications to building societies and other lenders which contained false statements. The sums obtained by the appellants by way of mortgage advances were actually paid to them by means of telegraphic or electronic funds transfer or by cheque.