FBI Issues Scam Warning for Home Equity Conversion Loans

The FBI has issued a scam warning for those interested in Home Equity Conversion Loans (or HECM loans for short). With increased interest in HECM loans, both conventional loans and FHA

guaranteed loans, fraud activity has also increased. FHA HECM loans offer buyers the advantage and safety of stricter controls and licensing requirements for FHA approved lenders, but some scams operate outside the areas FHA rules can protect the borrower.

Some reverse mortgage and HECM scams are engineered to trick the borrower into signing away their equity; other scams are designed to help a scam artist profit by illegally taking the equity built up in a renovated or “flipped” home. When the scam artist approaches a potential victim to initiate a HECM loan scam, they usually dangle an offer of free real estate, a too-good-to-pass-up investment scheme or refinancing deal.

Seniors are frequent targets for scam artists working HECM schemes. FHA HECM loans are designed specifically for those age 62 or older who want an FHA loan product that lets them cash in on the equity built up in their home over the years. The scam sometimes includes an offer of payment on a home the borrower didn’t actually buy, or a no down payment home loan.

There are two basic ways FHA HECM borrowers can protect themselves from reverse mortgage or HECM loan scams. The first is to simply ignore any unsolicited offers connected to FHA HECM loans, reverse mortgages and other loans.

The second is to seek your own FHA-approved lender for any FHA reverse mortgage product. Use the HUD’s Lender List tool to find an approved FHA loan issuer in your area. Don't accept unsolicited help for an FHA HECM loan or reverse mortgage product.

If you suspect you or your family have been targeted by a reverse mortgage scam artist, file a complaint with the Department of Housing and Urban Development by calling 1-800-347-3735.

Ranked Among Best Places to Live, Westfield Area New Jersey Experiences Increasing Real Estate Sales

April 30, 2010 -- Communities in New Jersey’s Westfield area have recently been named as

some of the best places to live in the state and the country, reports Westfield area real estate specialist Teri Malone. Warren, which is just around 10 miles away from Westfield and Scotch Plains, for example, was named #6 in CNN/Money Magazine’s 2009 “Best Places to Live” rankings, a list for which both latter communities were also named as contenders. The nearby borough of Mountainside, meanwhile, placed 8th in New Jersey Monthly’s list of the “Best Places to Live in New Jersey 2010.” This news comes at an opportune time for smart real estate investors looking to take advantage of home prices in the area.

“Anyone who knows the Westfield area won’t really be surprised by all these accolades,” says Malone. “These communities have been some of the most sought-after places to live in the region for generations. Not only are they an easy commute from Manhattan, they also offer many of the things that people are looking for – good schools, a lot of green space, real downtowns, and a true sense of community.”

Real estate values have historically been strong in the Westfield area, which while not immune to the effects of the economic downturn, has also fared better compared to other places. “Based on data from Trulia, home prices in Westfield have actually appreciated by 18.4 percent over the last five years,” says Malone. “This shows that while we’ve seen price adjustments in Westfield and its surrounding areas, especially in the higher end of the price spectrum, real estate values remain stable and investors take advantage of Westfield area homes (http://www.westfield-area-homes.com/).”

Mortgage Fraud Continues to Climb According To LexisNexis® Mortgage Asset Research Institute

New York, NY April 27, 2010 Reported incidents of mortgage

fraud and misrepresentation by professionals in the mortgage industry in the U.S. are continuing to climb and increased by 7 percent from 2008 to 2009, according to a new report released today by the Mortgage Asset Research Institute , a LexisNexis® service. While the pace has slowed since the 2007-2008 increase of 26 percent, the continued increase is believed to be attributed to better industry reporting and policing.

The 12th Periodic Mortgage Fraud Case Report examines the current state of residential mortgage fraud and misrepresentation in the U.S. committed by professionals, based on data submitted by LexisNexis® Mortgage Asset Research Institute subscribers.

Florida, ranked number one in 2006 and 2007, has moved back into first place in the country for mortgage fraud and misrepresentation after being displaced in 2008 by Rhode Island. Florida also has close to three times the expected amount of reported mortgage fraud and misrepresentation for its origination volume. Rhode Island is not ranked on the Top-Ten list for 2009 because the state’s sample size did not meet the minimum requirements set for the survey.

New York moved into second place, followed by California, Arizona, Michigan, Maryland, New Jersey, Georgia, Illinois, and Virginia. This is the first appearance on the LexisNexis Mortgage Asset Research Institute Report Top-Ten list for New Jersey and Virginia.

The detailed report was released at the MBA’s annual National Fraud Issues Conference in Chicago. The full report, as well as previous year’s reports, is available on the LexisNexis Mortgage Asset Research Institute Web site at: http://www.lexisnexis.com/risk/fraudreport

“The data suggests that in 2009 there was a 7 percent increase in the number of incidents of fraud reported to the LexisNexis Mortgage Asset Research Institute on top of the 26 percent increase reported in 2008. While this is a noticeable increase, we believe that mortgage fraud is significantly understated, even during times of massive origination volumes,” said Jennifer Butts, LexisNexis Mortgage Asset Research Institute manager of Data Processing and co-author of the report.