Monday, April 06, 2009

The Very Most Modern Frauds

Oh, yah. In California:

Con artists promising to intervene with lenders on behalf of homeowners who are having trouble making their mortgage payments are proliferating at warp speed, according to the latest statistics on mortgage fraud.

But an increasing number of owners are also trying to pull the wool over their lenders' eyes. In some cases, they are lying in an effort to save their homes from foreclosure. But in other instances, they are trying to convince lenders to grant them new, more favorable loans they don't really deserve

Frank Sillman, managing partner at Fortace, a Los Angeles-based fraud pursuit and recovery company, has seen a marked increase in loan-modification fraud, which could be described as just the opposite of the loan-approval fraud committed by many people to obtain mortgages for which they didn't really qualify.

“First, they overstated their incomes,” Sillman says. “Now they are understating them.”

How does that work?

If a borrower can show there's no hope that he can make his payments as originally promised, he can pretty much wipe the slate clean. Uncle Sam forgives the difference between what he owes and the selling price, his loan is closed and, unless he is already behind on his payments, his credit record remains intact

--Fortace also has uncovered many instances where solvent owners are imploring employers to tell lenders they no longer work there or are temporarily signing over assets to friends or distant relatives. “Everyone's trying to hide assets,” Sillman says

--Many owners whom Taylor says “are trying to get their share of the free money, one way or another” are also failing to disclose bank and stock accounts, neither of which are listed on credit reports. “It's easy to hide assets if you don't want to disclose them,” says Taylor

What a country!

HT: Ticker

1 comment:

J. Strupp said...

Geez what's next?

The "Homeowner's lobby" successfully getting the government to massage accounting standards so that they can claim that their home value is "artifically depressed" in an attempt to prove that they are, in fact, in a much better financial position than in reality?

As much as I dislike the attempts by many homeowners to take advantage of loopholes in government bailout funds, I'm equally as disgusted by the banking industry's commitment to massaging numbers to mask massive balance sheet losses.