How the FBI Plans to Prevent Mortgage Fraud in AZ

 

In 2012, the FBI estimates nearly $13 million was lost in fraudulent residential mortgage originations. As we continue to see a decrease in loan originations, high levels of unemployment and housing inventory, among other factors, we’ll continue to see cases of mortgage fraud. At the upcoming Industry Partners Conference, FBI Special Agent Desirae Tolhurst will speak to REALTORS®, mortgage lenders, and escrow agents about ways to protect themselves and their clients from mortgage fraud. AAR sat down with Special Agent Tolhurst to find out what she’ll be discussing at the event on September 11, 2013.

 

How long have you been with the FBI?

I’ve been with the FBI almost 10 years.

Did you first start out in the Mortgage division?

My first office was in Tucson. I’ve always worked white collar crimes. I started working in mortgage fraud in 2005; it was the height of the mortgage loan origination days.

What about white collar crime is so interesting to you?

Financial crimes are a different animal. People buy fancy stuff like cars and boats; they build a whole lifestyle through crime. We get to follow their patterns and the money. It’s their purchases that tell an interesting story.

Ultimately, we hit them where it hurts the worst. We end up taking their livelihood away and a lot of times they are tangible things.

Most people see the way celebrities live and they want that life. But, it’s a lifestyle that most can’t achieve. It’s when they turn to crime that things get interesting.

What’s the most rewarding part of your job?

The most rewarding part is that I get to give back to the community. When it comes to mortgage fraud, we’re all affected by this. You can’t refinance your home because your comparables are all properties that have been foreclosed. Or your 401K is depleted from the mortgage-backed securities.

To know that I’m doing something that benefits my community and it is making a difference.

Do you think mortgage fraud is on the rise in the US?

It’s pretty steady. We had a huge rise with loan origination fraud in early 2000. These days, it’s not as fast and loose and it once was, but it’s a steady stream. I think the main reason is that criminals see it as a faceless crime. People can justify their actions more then they’re stealing from a bank. But really, it’s nothing more than a bank robbery on paper.

What trends in mortgage fraud are you seeing now?

Right now, the FBI is seeing a rise in short sale and REO fraud. The market has really taken a 360 degree turn, and while housing prices are improving, people are still using short sales and REOs to their advantage.

One of the most common cases we see involves real estate agents who are committing fraud on legitimate short sale properties. As an example: a legitimate property is listed for $200,000. The agent collects multiple offers ranging from $150,000 to $110,000. The agent then submits only the lowest offer to the bank and does not disclose that there are other offers on the table. The bank accepts the offer, only to find out that the $110,000 offer actually came from someone who has partnered with the listing agent. The buyer then flips the property and the listing agent makes a commission on both sides of the deal.

These transactions aren’t just happening once or twice, but dozens of times.

What are some things that REALTORS® need to know to protect or inform their clients?

Every honest REALTOR® should be angry when they hear that their colleagues are committing fraud. Those agents are taking commission and clients that could have been yours. This is the case with every fraudulent sale that takes place.

The number one way to protect you and your livelihood is to disclose. Go with your intuition. If something doesn’t feel or seem right, let someone know. Treat it as if it were any other crime, like a robbery or an accident.

I like to tell REALTORS® that I’m here to help them.

When should someone contact the FBI?

The real estate world is actually pretty small, and very tight-knit. When you seem something that you think is suspicious talk to your peers about it. Once you explain what happened, you have a very good chance of meeting someone else that’s experience it as well. If it’s with the same person, you might have a case. We can get a case started on a name alone. If there are patterns, we’re trained to spot them.

What will you speak about at the Industry Partners Conference?

I’m going to talk about what the FBI is doing to combat mortgage fraud. I’ll be sharing ways real estate professionals can spot fraud and how to report it. I’ll also be talking about some recent cases and convictions and ways you can help protect homeowners and your industry.

Registration is $89 and includes breakfast and lunch, along with an entire day spent learning from mortgage lenders and escrow agents about what’s changed in their industry. REALTORS will find new ways to close transactions faster and build your network. Register today!

Tags: FBI, Industry Partners Conference, mortgage fraud