Fraud is generally defined as the “intentional misrepresentation of the truth in order to deceive another.” Chris Swecker, Assistant Director of the FBI’s Criminal Investigative Division, defines mortgage fraud as any form of “material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.” Fraud was a problem for the mortgage industry during the last phase of the real estate bubble. Fraudulent mortgage activities result in artificially inflated property values, increased foreclosure rates, significant financial losses, and increased consumer costs. Recently, ratings agencies have found substantial fraud in pools of early default residential mortgage backed securities from vintage 2006. Before the mortgage meltdown of 2007, industry statistics suggest that one in ten mortgage applications included some form of misrepresentation. The lack of industry-wide reporting requirements makes estimating the scope of mortgage fraud difficult. Nevertheless, prosecution of mortgage related fraud is rising dramatically. This course will look at: Types of fraud in mortgage lending Common roles played by fraud perpetrators Impact on the real estate and mortgage lending industry Strategies for brokers and originators on reducing fraud Mortgage fraud cases in Washington State An update on the new Distressed Property Law

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