Episode Details

In this episode of pplpod, we investigate the high-stakes world of mortgage fraud, defined as the intentional misstatement or omission of information to secure a loan. We explore how this white-collar crime creates significant financial risk and carries severe penalties, including imprisonment for up to 30 years.

Key topics covered in this episode include:

• The Schemes: From occupancy fraud, where investors falsely claim a property is a primary residence to get lower rates, to "working the gap," a technique that exploits delays in deed recording to stack multiple liens on a property.

• Liar Loans: A look at income fraud, where borrowers inflate their earnings or falsify tax documents to qualify for mortgages they cannot afford.

• Systemic Fraud: We break down "fraud for profit" rings that utilize dishonest appraisers and straw borrowers to defraud lenders, as well as "shotgunning," where multiple loans are simultaneously obtained for a single home.

• The Fallout: We discuss how the FBI labeled mortgage fraud an "epidemic" capable of triggering a financial crisis as early as 2004, and the subsequent enactment of the Fraud Enforcement and Recovery Act of 2009 (FERA) to boost enforcement funding.

Join us as we distinguish these crimes from predatory lending practices and uncover how scams like identity theft and cash-back schemes leave lenders and victims in financial ruin.