Mortgage Related Identity Theft Reports Could Increase
August 6, 2007
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There have been several Mortgage related Identity Theft cases reported recently. In such cases, criminals stole various sensitive personal information from their victims, such as social security number and driver's license, in order to qualify for mortgage loans. In one recent case, the Identity thief actually made timely monthly payments on the loan. The victim did not become aware of the situation until he received a refund check for closing costs of a mortgage that he had never requested! You cannot help but wonder: how many similar mortgage related Identity Theft cases remain undiscovered?
Through the end of 2008, it is estimated that as many as $1 Trillion in adjustable rate mortgages (ARM) will adjust for the first time. In October of 2007, it is estimated that over $50 Billion in ARM loans will adjust. Borrowers will face increased payments as their underlying mortgage rate is set higher. It is very likely that some borrowers will simply default on their loans. Identity thieves who victimized others in order to secure a loan will most likely default. As creditors seek payments, and attempt to repossess the properties, it is very possible that many consumers will discover for the first time that they are victims of Mortgage related Identity Theft.
With the average U.S. home price currently standing at about $212,300, $1 Trillion in adjustable rate mortgages imply as many as 4.7 Million homes will adjust their rate soon. If 1% of such loans are the subject of mortgage related Identity Theft, that would yield 47,000 cases. If 0.1% of such loans are the subject of mortgage related Identity theft, that would yield 4,700 cases. Regardless of the ratios, due to the large number of loans adjusting soon, it is very likely we will hear of many new cases of Mortgage related Identity Theft. Many such cases would be newly discovered or reported, although the crime could have occurred several months and possibly years ago.
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In a previous article published March 14, 2007 "Subprime Loan Problems, Stock Market Declines:A Result of lax Lending practices, Not Identity Theft and Fraud" (link available at end of this article), it was revealed that Suspicious Activity Reports, as reported by Fincen (Financial Crimes Enforcement network), did not reveal substantial Identity Theft related Mortgage Fraud. It is probably still true that current Mortgage problems, including the widely publicized Subprime Mortgage problems, are not necessarily related to Identity Theft, but to lax lending practices. Nevertheless, additional Mortgage related Identity Theft cases will undoubtedly be uncovered as Adjustable Rate Mortgages adjust their rates higher during the many months to come.
In order not to be caught by surprise, many consumers who have not been monitoring their credit report, should probably start doing so soon. Such report should contain information about any possible Mortgage loans that may have been authorized illegally in their name. Consumers can either order a free annual credit report they are entitled to under FACTA, or they may also engage through active Credit Monitoring service provided by another party such as Transunion, Equifax, or Experian.
How is it possible for an Identity Theft criminal to secure a Mortgage Loan amounting to hundreds of thousands of dollars, without the victim receiving any correspondence about such loan? Unfortunately, the answer is not very clear. It is possible that Identity Theft criminals simply change the address of their victims. It is also possibly that such criminals request correspondence and documents to be forwarded to a mailing address, as opposed to the actual physical address reflected in the credit report. In the age of paper-less communications, they may simply request everything to be sent via emails, and they may sign-up for online billing and statements. Finally, many believe that such illegal acts by Identity Theft criminals are made possible through the negligence, and possibly collaboration, of some mortgage brokers. No matter what tools such criminals use, consumers need to keep a constant eye on their Credit Report. Email Article |
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