Boise Mortgage Fraud and Subprime Loans
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When real estate markets are on the decline mortgage lenders try to capture additional business by coming up with new schemes. Subprime mortgage loans are designed for people with less than perfect or limited credit histories. In order to compensate for the increased credit risk, subprime loans carry a higher rate of interest than prime loans. The majority of these subprime loans were issued with adjustable rates. As the rates increased homeowners were faced with higher mortgage payments and elevated the possibility of default. The recent decline in the housing market and property depreciation added to the subprime problem. Many homeowners tried to get out from under their debt only to find that they owed more on There are two main factors that pushed the mortgage industry into non-traditional lending practices. 1) Mortgage lenders trying to hasten the lending process. 2) The increase in home prices over the years. These events may of contributed to an increase in mortgage fraud as higher housing prices tempted borrowers to overstate income and assets to qualify for a mortgage loan. Mortgage fraud perpetrators also likely took advantage of the relaxed lending practices, that were on the rise, to commit fraud for profit. |
their home than what it was worth. As homes depreciated and demand declined, homeowners could not sell their homes to satisfy their debt leading them into foreclosure.