California Mortgage Bankers Association Fraud Update

Transcription

1 California Mortgage Bankers Association Fraud Update Ann Fulmer May 27, 2010 fraud protection you can bank on

2 Q Fraud Risk Geographies Interthinx Mortgage Fraud Risk Index Report Q1 2010

3 Fraud Risk Geographies Interthinx Mortgage Fraud Risk Index Report Q1 2010

4 Fraud Risk Geographies Q MSAs Interthinx Mortgage Fraud Risk Index Report Q1 2010

5 Fraud Risk Geographies Interthinx Mortgage Fraud Risk Index Report Q1 2010

6 Fraud Risk Geographies Rank Zip City and State Mortgage Fraud Risk Index 2010 Q Patterson, CA Queens Creek, AZ Glendale, AZ North Highlands, CA Atlanta, GA Atlanta, GA Menifee, CA Hesperia, CA Victorville, CA Ceres, CA 391 Interthinx Q1 2010

7 Fraud Risk Drivers Interthinx Mortgage Fraud Risk Index Report Q1 2010

8 Fraud Risk Migration Interthinx Q1 2010

9 Type Specific Fraud Risk Interthinx Mortgage Fraud Risk Index Report Q1 2010

10 Type Specific Fraud Risk MSAs with the Highest Occupancy Fraud Risk Interthinx Mortgage Fraud Risk Index Report Q1 2010

11 Type Specific Fraud Risk MSAs with the Highest Employment/Income Fraud Risk Interthinx Mortgage Fraud Risk Index Report Q1 2010

12 Type Specific Fraud Risk MSAs with the Highest Identity Fraud Risk Interthinx Mortgage Fraud Risk Index Report Q1 2010

13 Fraud is Cyclical and Self-perpetuating Fraud creates uncertainty in housing prices Inflationary schemes Flipping Affirmative misrepresentations Deflationary schemes Flopping Material omissions Fraud leads to foreclosures Foreclosures depress prices; create additional uncertainty and vacancies Vacancies = crime and social disorder = blight and flight = additional opportunities for fraud

14 Fraud is Cyclical and Self-perpetuating Fraud persists temporally and geographically 19 of current top 25 fraud risk states are perennials Economically challenged states in Midwest Markets seeking bottom in West, Florida Serial frauds involving same properties Migrates according to prevailing market characteristics and opportunities Fraud for profit lifted prices during boom; affordability issues led to fraud for housing 66% of mortgage related SARs reference fraud by or on behalf of the borrower

15 Housing Price as Fraud Driver

16 Housing Price as Fraud Driver Los Angeles Las Vegas Phoenix

17 Fraud Trends SHORT SALES Flopping: deflating short sale price; manipulating BPOs Simultaneous closings and flips Non-arms length transactions Land trusts Dough for a day and joint ventures; fake POF Facilitators and one-stop shops

18 Debt Elimination Scheme Treasury Bonds Accused: Lloyd Clifford Norris d/b/a Hovis Management Group Involved in several condo conversions in Atlanta Arrested in mortgage fraud sting 2/9/2010 $80 billion in counterfeit US Treasury bonds found in his home Allegedly running foreclosure rescue scam Files release/satisfaction, revocation of POA for fraud by lender Counterfeit bonds used for payoff of mortgages and car loans

19 Fraud Trends Liens of Adverse Possession Florida Claiming ownership; renting properties or selling Foreclosure interceptions Illinois, Nevada, Arizona Fake judgments and mortgage assignments Foreclosing in perp s name (usually a LLC); property then sold to 3 rd party

20 There s No John Wayne Kelsey Hull and Two Brothers Investment Group 240 properties FBI investigated flipping scheme; agent was transferred 1 year delay before new agent assigned/up to speed $2 million in restitution Reverse Mortgage Scheme: 5 companies; 200 properties and counting Forged gift letters Altered appraisals Stole RE agent IDs and changed MLS data Purchase then equity-out HECMs

21 Ann Fulmer Vice President (office) (cell)