According to the FBI, mortgage fraud is on the increase and Nevada has made the list as one of the “top 10 mortgage fraud hotpots�. To date, the FBI has received over 21,944 reports of suspicious activity in the real estate industry; and is currently investigating 721 pending cases of real estate fraud. The result of having so many bad loans is being felt in both the commercial and residential real estate arenas.
For commercial lenders, it is an $8 trillion concern. Mortgage backed securities are outstanding and are held by a wide range of investors. Even the Federal Reserve uses mortgage back securities as collateral when dealing with banks. Maintaining the integrity of this market is of great concern to lenders.
For consumers, an increase in bad loans can increase their borrowing costs. If the risk increases, investors will demand a higher yield from mortgage-backed securities. The banks in turn will pass these costs on to the consumer in the form of higher mortgage rates.
Additionally, some instances of fraud result in artificially inflated property values that can cause neighborhood property values and real estate taxes to skyrocket. This results when property information is entered into the Multiple Listing System (MLS) and used by reputable agents and appraisers to prepare comparable sales reports in assessing market value.
Las Vegas Real Estate information brought to you by MillionSaverHomes.com.
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