Daily Real Estate News  |  March 14, 2008

Tough Markets Bring Fraud to Surface
Mortgage loan origination may have fallen to its lowest level since 2002, but mortgage fraud was on the rise in 2007, according to the Tenth Periodic Mortgage Fraud Case Report, prepared by the Mortgage Asset Research Institute.

Speaking at a MBA fraud conference in Chicago yesterday, Merle D. Sharick, vice president of sales for MARI, stated that Suspicious Activity Reports received by the Federal Bureau of Investigation and the Financial Crimes Enforcement Network from federally regulated banks jumped 139 percent between 2006 and 2007. The jump in fraud will spell record losses for lenders, easily topping $1 billion, says the report.

As it was in 2006, the most common types of mortgage fraud were misstatement about employment and income. However, borrowers’ failure to disclose debts, liens, and judgments grew by 50 percent in the last year.

Several factors contributed to the rise, says Sharick, including reduced loan volume that prompted lenders to more carefully scrutinize loans, falling home values, and an oversupply of properties, especially in markets such as Florida and Nevada where a significantly number of recent home purchasers were made by investors. (View a report and state breakdown of mortgage fraud by the Mortgage Asset Research Institute.)

In efforts to staunch the fraud flood, the Mortgage Bankers are developing a national mortgage fraud database so its members can share information on mortgage scams. The association also plans to develop a national database of property values.

— By Mariwyn Evans for REALTOR® magazine online

Daily Real Estate News  |  March 11, 2008Why Now is a Smart Time to Buy
Now is a great time to buy a home, say the financial gurus at the Wall Street Journal.

The Journal calls it a buyers market and offers these suggestions for first-timers getting their feet wet. While their advice is solid, it’s not revolutionary, but some potential customers might find it reassuring.

Remember this is a place to live not a stock market investment, they say. Lenders want buyers to spend no more than 28 percent of their gross monthly income on mortgage payments, real estate taxes, and home insurance. Buyers shouldn’t count on stretching further because lenders won’t approve their loans.

• Cash is king. Having enough money in the bank to pay closing costs that are typically an additional 2 percent to 3 percent of the price of the home is necessary.

• Location. Location, location. As any good real estate professional knows, homes in good school districts where the crime is low are much more likely to hold or increase their value.

• Compare. Besides just looking at the comps, buyers should examine what it would cost to rent a similar house in the same area and they might consider what it would cost to buy land and build a comparable home.

• Think long haul. It will probably take at least six or seven years of living in the house to be able to sell and come out ahead.

I'm not sure how many people are getting it but my email this evening has received numerous messages from others accusing anyone and everyone of using or abusing craigslist.  I don't know where exactly it started but it seems to have something to do with receiving an email regarding the posting of something on craigslist and it seem to originate from an unknown address except "phoenix-foreclosures@real-estate-education-club.com.  I've received messages stating everything from "drop me off the list" to "I don't have an account" to even one saying "add me to the list".  It seems it may have started over someone with a craigslist account requesting to change thier password.  Like many others, I don't have an account with them but the number of emails I received have been enormous and the more people try to reply, the more is sent out.  If you know more about it and how to stop it, I'd sure like to know.  Until then, I'll do like many of you and just keep using the "delete" key.