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Mortgage Fraud, Fraud And Fraud

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Mortgage fraud is one of the fastest growing crimes in the United States. (Freddie Mac, 2015) There are three categories of mortgage fraud, fraud for housing, fraud for profit and fraud for criminal enterprise. Fraud for profit schemes are conducted by a group of people who play multiple roles in the fraud. The masterminds or initiators receive the largest percentage of the profit while others in the scheme may receive a few thousand dollars for their part in the misrepresentation. Mortgage brokers and loan processors create fictitious credit profiles and conspire with real estate appraisers to inflate property values. For-profit schemes often involve multiple industry professionals/insiders and multiple transactions. The…show more content…
Measuring these fluctuations is difficult and often leads to risk underestimated with growth and overestimated in recessions. In an economic boom, this contributes to rapid credit growth, to inflated collateral values. In recessions, when risk and loan defaults are accessed to be high the reverse tends to be the case. Many banks will take on more risks knowing that they could always transfer a large part of them. This may lead to ‘Collusion Fraud’ or ‘Fraud-or profit’ which is the most costly type of fraud.

Background Established in 1825, Liberty Bank is Connecticut’s oldest mutual bank, with more than $3.5 billion in assets and over $500 million in capital. Throughout the central, eastern, and shoreline areas of the Connecticut, Liberty Bank has grown to 49 banking offices. Liberty Bank is a full-service financial institution that offers home mortgages, insurance, investment services as well as consumer and commercial banking finance products. Liberty Bank has been rated outstanding for commitment providing superior personal service and unmatched community involvement. For the first time, Liberty Bank also introduced itself in Fairfield County with a brand-new adjustable-rate mortgage product suited to home buyers in this market, generating over $100 million in closed loans. Overall, Liberty Bank picked up a record-breaking 10,926 new households in 2013. Liberty Bank will also be partnering with Fannie Mae’s and their new
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