Boston condos for sale: Is mortgage fraud on the rise?
Loans have underwriting guidelines that must be met for a Boston midtown high rise condo buyer to obtain a mortgage. These guidelines are in place to help ensure that the buyer has the capacity to repay the loan.
Unfortunately, in the early 2000’s, mortgage underwriting was like the Wild West. Underwriting guidelines were too lax and sometimes weren’t being properly followed; loans were just pushed through. Information was being fraudulently altered on mortgage applications to approve Boston condo buyers for loans they couldn’t otherwise qualify for.
Mortgage Fraud Not As Common As It Once Was
Mortgage fraud was a growing epidemic back in the early 2000’s. Leading up to the crash, cases of mortgage fraud grew by leaps and bounds. Some cases were downright fraudulent schemes hatched to steal hundreds of thousands of dollars, while others were simply a fudge of the numbers that enabled a well-meaning Boston condo buyers to finance their dream Boston condo for sale.
These fraudulent transactions contributed to the expansion of the Boston condos for sale bubble and over-inflated prices in many areas. Even well-meaning Boston condo buyers could find themselves overpaying for a home when comparable properties were sold at artificially high prices. These sales were also used by appraisers in their appraisal reports, and ultimately, the value of homes ballooned.
In the early 2000’s fraudulent transaction were skyrocketing prior leading up to 2008. Since the crash, mortgage fraud has not entirely gone away, but it’s definitely nowhere near peak levels. Lenders have put multiple measures into place to thwart these types of schemes and unscrupulious activities. The result is more arm’s length transactions, fewer loan defaults, and increased market stability.
Can technology be the new instrument for mortgage fraud for the future?
However, technology seems to be facilitating new methods to carry out fraud by buyers needing a little extra bump to qualify for a loan. New services are sprouting up that allow potential borrowers to cheaply and easily produce falsified documentation required by the lender. Most of these fraudulent activities are probably used by well-meaning and generally qualified buyers; many who don’t realize the repercussions their actions could bring.