Missouri Mortgage Improprieties Under Investigation

The FBI is investigating alleged mortgage fraud schemes in the Springfield, Mo., area, some of which may be driving a spike in foreclosures on homes sold to unsuspecting buyers at inflated prices.

FBI Special Agent Josh Nixon couldn’t comment on specific investigations or the alleged perpetrators, but did say Missouri mortgage fraud activity is on the rise in Springfield as it is across the nation.

Missouri now ranks sixth among states with the most serious mortgage fraud problems, according to a new index compiled by the Mortgage Asset Research Institute.

“Mortgage fraud is one of the fastest-growing frauds in the United States, along with identity theft,” said Nixon, who is based in Springfield. “The FBI has received numerous allegations regarding mortgage fraud in this area, and we evaluate every allegation.”

The real estate community is buzzing about the disproportionately high list prices in some areas and an upsurge in Missouri mortgage foreclosures - two signs often associated with mortgage fraud.

Carol Jones Realtor LeeAnn Quinn said a handful of conspicuously priced properties caught her attention several months ago.

“They stuck out like a sore thumb,” Quinn said.

“I did show a house that I thought might be in that (alleged scheme). It was sold at a certain price, and it was bought a few months later at a higher listing price … quite a bit higher.”

Quinn, who hasn’t noticed the trend lately, said less scrupulous real estate agents or home builders may have turned to a number of illicit tactics when the housing market began showing signs of a slowdown last year.

Foreclosures in the Missouri real estate market increased 96.5 percent in 2006, and Quinn said that area real estate agents have filed complaints with the Missouri Real Estate Commission.

Complex mortgage loan fraud schemes uncovered by authorities in the Kansas City and St. Louis housing market have prompted a steady stream of federal indictments in recent years.

Last month, a Kansas City councilwoman and a former Jackson County official were among a group of alleged conspirators behind a scheme to defraud a mortgage lender.

The largest mortgage fraud case prosecuted by a U.S. attorney in Missouri was a series of schemes orchestrated by a man who was sentenced to 12 years in federal prison without parole in October. His schemes involved home loans totaling more than $19 million for more than 300 properties.

SOURCE: Springfield Business Journal