Con artists promising to intervene with lenders on behalf of homeowners who are having trouble making their mortgage payments are proliferating at warp speed, according to the latest statistics on mortgage fraud.
But an increasing number of owners are also trying to pull the wool over their lenders' eyes. In some cases, they are lying in an effort to save their homes from foreclosure. But in other instances, they are trying to convince lenders to grant them new, more favorable loans they don't really deserve.
Frank Sillman, managing partner at Fortace, a Los Angeles-based fraud pursuit and recovery company, has seen a marked increase in loan-modification fraud, which could be described as just the opposite of the loan-approval fraud committed by many people to obtain mortgages for which they didn't really qualify.
“First, they overstated their incomes,” Sillman says. “Now they are understating them.”
In many cases, out-of-work industry insiders who have been sidelined by the housing recession and are no less desperate to generate a little income are coaching borrowers to hoodwink lenders.
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