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Curbing Mortgage Fraud in South Carolina
The South Carolina Department of Consumer Affairs (SCDCA) created a mortgage fraud hotline in June 2008. How is the SCDCA's effort to aid consumers working out?
June 04, 2010 /Personal Finance PR News/ -- As home values skyrocketed before the housing bubble burst in 2008, many South Carolinians fell victim to mortgage fraud. In 2006, the FBI named South Carolina a Top 10 Hot Spot for mortgage fraud. The designation could have been attributed to the prevalence of "flipping" (the practice of buying property at a very low price, quickly making nominal improvements, and selling the property for a profit soon after, usually before the first mortgage payment was due). The reality show "Flip This House", featuring Charleston-based Trademark Properties, sparked many imitators who tried to duplicate Trademark's success through illegal means.
Mortgage fraud could also be linked to the building frenzy that engulfed many coastal counties, including Horry County, Florence County, Georgetown County, Charleston County, Berkeley County, Beaufort County, Colleton County and Jasper County. A number of waterfront condominiums, townhomes and commercial projects were based on perceived demand and opportunities to capitalize on rising property values.
Industry experts and law enforcement point to a desperate desire to maintain profits - and in some cases, a certain standard of living - in the face of a declining economy. In its 2008 Mortgage Fraud Report, the FBI theorizes that industry employees sought to maintain the high standard of living they enjoyed during the boom years of the real estate market and overextended mortgage holders were often desperate to reduce or eliminate their bloated mortgage payments. This lead to record numbers of Suspicious Activity Reports (SARs) relating to mortgage fraud.
Addressing an Epidemic
The South Carolina Department of Consumer Affairs (SCDCA), in conjunction with the Attorney General's Office, established a mortgage fraud hotline in June 2008 to handle consumer complaints regarding financing schemes and to offer assistance to those having immediate issues with mortgage scams. The SCDCA funded the hotline through state appropriations and licensing fees from mortgage loan brokers, loan originators, pre-paid legal services, credit counseling agencies and professional employer organizations. Like many government programs during the economic downturn, the mortgage fraud hotline was discontinued due to budget cuts and revenue shortfalls.
The SCDCA handled more than 500 phone calls between June 2008 and August 2009, but this was only one of many actions to curb mortgage fraud. According to its 2009 Accountability report, the Department continued its work with the Coalition Against Fraud - a joint venture with the FBI, U.S. Attorney's Office, Sheriff's Association and the South Carolina Attorney General - by sharing information about suspicious activity and mortgage fraud complaints. The Department held forums involving bankers, mortgage loan originators, advocacy groups and law enforcement to curb fraud and develop uniform licensing and monitoring processes. The Department also produced a webinar educating consumers and homeowners on specific elements of mortgage fraud and how they may protect themselves.
Future Steps in Mortgage Fraud Prevention
Mortgage fraud is still a prevalent issue in the United States. South Carolina still must deal with a record number of foreclosures, a situation that typically creates ripe opportunities for mortgage fraud. While South Carolina is no longer a national leader, nearby states Georgia and Florida still remain Top 10 Hot Spots. The FBI has nearly 3000 pending mortgage fraud investigations nationally, and the U.S. Attorney has dedicated more resources to investigating and prosecuting fraud in South Carolina.
The South Carolina Department of Consumer Affairs recently relaunched the mortgage fraud hotline to help people who have questions about their mortgages, as well as those who encounter suspicious activities such as high-pressure refinance inquiries and foreclosure rescue scams. If you believe you are a victim of mortgage fraud, or have been promised a large (and quick) profit for your property, contact an attorney as soon as possible to learn more about your rights under South Carolina law.
Article provided by Monckton Law Firm, P.A.
Visit us at www.moncktonlawfirm.com
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