FBI expects more US mortgage fraud cases

Investment and mortgage schemes aimed at delinquent US homeowners rose in 2010 and may rise even further if the economy continues to slide, according to the Federal Bureau of Investigation (FBI).

The bureau stated in its annual report that pending investigations, the number of cases rose 12 percent to 3,129 cases in the fiscal year ended 30 September 2010, up 90 percent from the previous fiscal year.

"If we have continuing high unemployment and increased numbers of foreclosures, what we see is a greater percentage of the population of existing homeowners being vulnerable to these schemes," said David Cardona, Deputy Assistant Director at the FBI.

The financial crisis and the downfall of the housing sector resulted in a series of foreclosures. Last year, 2.5 million foreclosures were initiated, with a similar figure anticipated this year.

This saw the proliferation of mortgage fraud, including foreclosure rescue schemes and loan modification scams, in which perpetrators convince borrowers that they can save their homes through upfront fees and deed transfers.

Cardona said stock market volatility has also lured more Americans into fake investments.

California, Florida and New York are among the listed “hot spots” for mortgage fraud.

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