June 24 average daily rates in Orange County for 30-year fixed loans with one-point fee: Conforming up to 6.078%, Jumbo up to 7.446% and Conforming-Jumbo up to 7.208% (Note: conforming-jumbo rates are for loans from $417,000 to $729,750, while conforming is up to $417,000 -- both types are sold to GSEs. Jumbos here are $730,000 or higher and not sold to GSEs.)
Source: Newspaper Chart Services 
Did mortgage fraud peak in 2007?
May 14th, 2008, 12:01 am · 4 Comments · posted by Matt Padilla, Register Reporter and Blogger
The Federal Bureau of Investigation released an analysis of mortgage fraud that says fraudulent activity spiked last year.
The agency received 46,717 Suspicious Activity Reports related to mortgage fraud last year, up 31 percent from 2006. Just 7 percent of those reports included an exact dollar amount of loss, but that totaled $813 million.
The FBI said: “Our caseload has also escalated. By the end of fiscal year 2007, we were handling just over 1,200 mortgage fraud investigations—a 47 percent increase from 2006 and a whopping 176 percent increase from 2003.”
The types of fraud to watch for in a down market range “from “builder-bailout” schemes where developers unload excess inventory through financial trickery…to foreclosure rescue frauds that trick homeowners into signing over the deed to their house; from seller-assistance scams that use false appraisals to sell homes … to identity theft that leads to home equity credit lines being opened and drained,” the FBI said.
Yes, but these days lenders are looking more closely at documents of income and
assets of their borrowers, experts say. Such practices might be enough to offset growth in the scams mentioned above. For example, forget those so-called ‘liar loans,’ where borrowers just say what they earn and banks believe them if their credit scores are high enough. What do you think?
- O.C. loan officer gets 10 years for stealing from homeowners
- FBI expands mortgage probe
- La Habra man, 18 others indicted in alleged mortgage scam
- Subprime fraud rampant at end of housing boom
- A brief history of the liar’s loan (and a poll)
May 14th, 2008 at 3:24 pm
Sadly, blatant fraud was not needed to profit from the bubble. Just some “subtle” fraud as follows:
1. In 2006, Investor buys a home 100% LTV and immediately rents it out for $3,000 per month.
2. Investor buys another home 100% LTV and immediately rents it out.
3. Investor does this as many times as a lender will let him based on his paperwork submitted.
4. The fraud committed would be: 1. declaring that each home is owner occupied 2. not disclosing his other home ownership interests
5. Within 30 days, investor refinances to pull out equity that amounts to about $50,000 per home = $250,000 total.
5. Also, investor has 5 homes all producing monthly income. Guess what? Investor NEVER PAYS A DIME OF MORTGAGE FROM DAY ONE. The rent produced from each home? $3000/month. That’s $180,000 for a year or until the banks kick out the tenants. Also, investor keeps last months rent and security deposit.
Since a different bank financed each of these 5 loans, they really have no idea what happened and considers this just another subprime/Alt-A loser right?
What’s the very worst thing that happens to the investor? Bad credit. And because the fraud is not as overt as the other fraud, this is the one that stays under the radar.
May 14th, 2008 at 4:16 pm
thanks oc trojan for the insight.
May 14th, 2008 at 11:21 pm
Heck there’s more fraud perpetrated in the comments section of this blog each day than for all of 2007.
May 15th, 2008 at 10:49 am
If people only knew… seriously, there’s a reason why Ferrari and Porsche dealers in O.C. couldn’t keep up with demand and mortgage superstars are only half the story.