Everyone knows that home purchases and new mortgages have decreased dramatically over the past year. One very surprising fact, however, is that the 2^nd quarter of 2008 showed a 42 % increase in loan fraud activity over the same period in 2007. This is an amazing increase when you consider that the volume of loans decreased by approximately 30%.

There are apparently many ways to commit fraud when filing for a loan, and information regarding many of them is readily available on the internet. These methods of fraud consist mainly of phony income verifications and credit reports, falsified employment records, financial assets being “rented” from others, and inflated appraisals. It is the availability of the necessary forms, etc. (all with disclaimers that they may not be used for fraudulent purposes) that are enabling people to become criminals. Many families are so used to all of the luxuries they have had over the years that they are desperate to continue their former lifestyles. With income down and costs up, they are finding it necessary to lie and cheat to maintain this way of living. It is sad to think that people are willing to break the law simply to maintain their creature comforts.

Another scam being used to obtain a mortgage fraudulently is to search the web to locate what is known as “straw buyers”. These are people with good credit scores and incomes who are willing to sell their financial identities temporarily to unqualified buyers. Of course, they wish to be paid very well for their part in this scam.

This large increase in loan fraud is a direct result of the economic problems facing our country. It is also, however, a terrible statement about the characters and morals of many of our citizens that they would allow themselves to become thieves.