I caught an article published in the Kansas City Star this morning that blew my mind. The Federal Bureau of Investigations reports that there are an estimated $10 Billion in fraudulent loan applications each year in America. The problem is so bad that they have launched a sting initiative called Operation Stolen Dreams.
This may be no surprise to many MLS executives. If you operate a large or mid-sided MLS, the FBI has already contacted you to gain access to MLS data. This is the front door approach.
In some cases, the FBI gets a real estate license and joins the MLS. You could call it the back door approach. This is probably a breach of the MLS Terms of Use, but hey – it’s the FBI. Who are you going to call?
In the article, the FBI points to two targets in the fraud scheme – organized crime from overseas; and the real estate industry itself, “licensed and unlicensed brokers, real estate agents, attorneys and other members of the industry who use their expertise to exploit vulnerabilities in the sector.”
The primary fraud committed is short sale fraud and flipping of houses.
Another type of fraud that goes unmentioned in the article is loan fraud. Identity thieves will take out a home equity loan on your house without you knowing it. Yikes.
