By Thomas Brown

Homeownership is one of the great American dreams. It provides a sense of accomplishment, safety and family pride. And in most cases, it is also a good financial investment. In fact, in certain markets throughout the country, many homeowners have realized healthy returns on their investment as a result of a sizzling real estate cycle. Unfortunately, this has not gone unnoticed by fraudsters who thrive on bilking lending institutions out of billions.

Mortgage fraud can be as simple as a loan applicant lying about income or employment and as complex as a ring of conspirators using identity theft, fake appraisals and straw buyers to manipulate lenders into approving false mortgages. Additionally, the highly competitive mortgage environment has placed significant pressure on underwriting practices fueling explosive home values, making it an even more lucrative opportunity for fraudsters. This process forces lenders to drive up rates to cover additional costs, increasingly threatening the ability of homeowners to receive available mortgage funding for the American dream.

According to the FBI, mortgage fraud is steadily rising, and brokers and lending institutions are all at risk of losing substantial amounts of money. These statistics show that reports of mortgage fraud have tripled to 21,994 in the last two years; and the dollar value of these alleged crimes has quadrupled to $1.01 billion.

Naturally, this amount of fraud costs both businesses and consumers alike. Fraud increases the price of mortgages for all buyers, as lenders pass on their higher costs. Even worse, the FBI indicates that the amount of deceit is undoubtedly much greater than the reports state.

Read more by downloading entire article in PDF form.