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Ethics
by leon on October 3, 2007

Is there a link between foreclosures, the hot housing market and fraud? Very much so, says Anthony Sanders, a professor of finance and real estate at the WP Carey School.
Once the housing market cools, he says, there is an increase in foreclosures, delinquencies and defaults of mortgage loans that have been based on fraudulent information. This is why as foreclosure rates have risen since 2002, the number of mortgage fraud cases under investigation by the FBI increased 237 percent. According to Sanders, there are two types of mortgage fraud: fraud for property, where a borrower misrepresents information in order to get a loan for a home to live in; and fraud for profit, which is structured almost like an elaborate Ponzi scheme with multiple loans and convoluted structures.
The hot housing market made it a lot easier to commit fraud. Put simply, the higher housing prices enticed more people to perpetrate fraud.
But Sanders does not believe that the Government should intervene and that the market will ultimately self-regulate. Maybe, but that means a lot of people will be hurt along the way, rightly or wrongly. Which means there will be no way the politicians would butt out.
Permalink: Fraud and foreclosures
Trackback: http://publish.creative-weblogging.com/publish/mt-tb.pl/94435
Mr Wong
Vote for Fraud and foreclosures:
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Rating: 8.83 out of 6 vote(s) cast.
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Response from:
TSmith
(10/04/07 2:58am)
Response from:
San Diego Foreclosures
(03/17/08 12:08pm)
This is great information for foreclosures, we have a website in San Diego that features foreclosures links a resources that you should submit your website to be listed in the directory. Thanks for this information.
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site, and our company has been aware of the impending foreclosure issues for months. In my opinon the contributers to the failing real estate market are subprime mortgages and ARM's that are causing homeowners that should not have qualified for a home loan in the first place to face foreclosure, the depreciation in housing prices (especially as foreclosures flood the market!) and the fact that so many are unable to sell their homes. More and more research shows that the housing market will not recover until at least next year, and it will most likely take years to get us back to where we were before the bottom fell out. The Fed interest rate cut helped some, but if they truly want to help struggling homeowners they need to make further cuts and write legislation that prevents borrowers from being taken advantage of by shady lenders.