Thursday, July 22, 2010

THE MORTGAGE FRAUD TRIANGLE: Pressure, Opportunity and Rationalization - Part 3


There are many pressures in today’s society thanks to the recession that is currently taking place in our economy. Many people are suffering financially with such issues as debts or high medical bills. There is also a perceived financial need when you are surrounded by numerous individuals rich in material goods. In the mortgage industry, there is pressure put on brokers from the system. Managers will place tremendous pressure for production on their brokers to close. Therefore, there is additional pressure to compete, keep up with fellow brokers and earn. Unfortunately, these were great enough incentives for fraud to establish itself and grow.

Brokers have that pressure to close put on them by their supervisors, but they also feel it coming from their borrowers. They are looking to quickly close a file to benefit their borrowers. So, some individuals cave and commit fraud in order to get their clients into a home as fast as possible. Other brokers might also commit fraud in order to get their clients a lower rate in a refinance.

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