Mortgage fraud essentially is the root of our current financial challenges as a state and as a country. Millions of Americans were convinced that the real estate bubble would be forever expanding and that if they didn't want to be left behind it was best for them to "get with the program." Unfortunately, in their efforts to get as many Americans with the real estate bubble program, many unscrupulous mortgage lenders engaged in mortgage fraud or what they at the time excused as stretching the truth. Fortunately, Texas passed legislation criminalizing mortgage fraud in an effort to better protect consumers and communities. But mortgage fraud is still negatively impacting Texas communities in ways many did not imagine during the real estate boom. Below are a few ways that mortgage fraud is destroying Texas communities:
- The most obvious ill side effect of mortgage fraud is the elevated number of foreclosures ravishing Texas neighborhoods. So many homeowners who purchased more house than they could really afford based on falsified records are now losing those homes to foreclosure and leaving many communities blighted.
- Mortgage fraud can artificially inflate housing values in an area by exaggerating the value of properties in order to get more money loaned. Eventually those artificially inflated home values will meet reality as we are experiencing now and leave many homeowners with more mortgage than their home is worth.
- Mortgage fraud creates an environment of financially weakened homeowners who are desperate to escape foreclosure and who become vulnerable to foreclosure rescue scam artists. The result is that homeowners who may have been able to find real help often get taken advantage of by scammers when they are already at the end of their rope.