More real estate investors than ever are lying in order to buy houses, according to a recent Fraud Risk Report from Interthinx . According to the report, occupancy fraud risk, which means that the borrower claimed to live in a home in order to get a mortgage or get better terms on a loan, was up 25 percent in the first quarter of 2011. Additionally, there was a dramatic rise in employment/income fraud risk, with five metropolitan statistical areas (MSAs) showing increases in this risk sector of more than 70 percent . Employment/income fraud involves providing misleading information about one’s employment or income.
“Risk is becoming more prevalent across the board,” said Kevin Coop, Interthinx president. He advised lenders to adhere to “strict prefunding fraud detection policies…to keep fraudsters at bay” .
Given how important it is to get houses off the market, do you think that lenders should ease up on occupancy requirements?
Let us know what you think about occupancy fraud – is it really a problem as long as people are buying the houses? – in the space below.
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