It’s unreal.  For better than a year now, the Federal Government and the banks have known that Florida was a hot bed for fraudulent mortgage activity, yet here we are a year removed and the crooks are still at it.  Why make an issue of it?  Well, these guys are giving us all a bad name.  The one upside to the down Florida mortgage loan market was the assumption that the scammers, con-artists and crooks would seek more fertile pastures, yet from this story, it seems as if that hope has been dashed.

Despite more stringent underwriting of mortgages in the wake of record foreclosures, lenders continued to battle the problem of home loan fraud during the second quarter of theyear, with Florida borrowers again submitting more questionable loan applications than borrowers in any state in the nation, according to an industry report released Tuesday.

Reports of suspected mortgage fraud rose 45 percent nationally between April and June compared to the same three-month period a year earlier, according to the Mortgage Asset Research Institute, a mortgage-fraud data clearinghouse. Fraud reports were up 3 percent from the previous quarter.

Florida, crowned fraud king in both 2006 and 2007, topped the second quarter ranking with 21 percent of loans reported to contain false information. California ranked second with 15 percent, and Illinois ranked third with 12 percent.

Within Florida, the Miami metropolitan area was the biggest fraud hot spot. The most widespread abuses involved beefing up applicants’ financial profiles, including inflating income and assets and gussying up their employment status. Fabricated bank statements were also a problem, the report noted.

How in the heck do these people sleep at night?  Fabricating bank statements, are these people nuts?  In an earlier post we spoke about how some mortgage companies engage in posting bogus rates to get the people through the door, but this takes it to a whole new level.  We can only hope that harsher penalties and better quality controls are enacted sooner rather than later.  We’re bailing out banks with tax payer dollars and they’re still taking in garbage mortgages?  This does not set well with this mortgage professional and tax payer!  It’s a real shame that the Florida mortgage market has been turned into a playground for the crooked because some of us out here are just trying to give clients a good deal while telling them the cold, hard truth.  These guys that are submitting fraudulent loans and the borrowers that are working with them aren’t doing the people of Florida any favors.  What they are doing is creating an unceasing pipeline of distressed properties that will drive the values of all of our homes down.  This is a sick, sick, cycle and something SERIOUS needs to be done about it!