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The Story:
In 2009, Sally was having trouble keeping up with her mortgage payments, and by September, she received a foreclosure notice in the mail. A few days later, she was called by a man who said he could help. He said she could have a check for $40,000 to help pay her bills, and she wouldn’t have to worry about foreclosure any more. Sally signed papers in late October at a title company in Maryland. She went home with a $40,000 check and started making her new house payments to District Properties in December. Nine months later, Sally started having trouble making her house payments again. This time, instead of a foreclosure letter, she received an eviction letter in the mail. Sally gradually realized that she no longer owned her home; she was simply a renter. In a panic, Sally called District Properties. The man who answered the phone told her that Subprime Mortgage Co. held two loans against the house, one for $264,000 and one for $66,000, but she could buy her house back for $360,000 – three times the mortgage she had a year earlier. Sally’s income and credit were not good enough to buy her house at that price. The man said, “I’m sorry” and hung up.

The Profile:
Like hundreds of District residents, Sally became a victim of mortgage fraud for profit, sometimes called “equity skimming.” The scheme she fell victim to was orchestrated by a variety of people, including a mortgage broker, real estate agent, appraiser, “investor,” “straw buyer,” and “bird dog.” Each person in the scheme received a portion of the equity in Sally’s house. In the end, Sally lost her house, Subprime Mortgage Co. foreclosed, and the group that orchestrated the fraud made more than $100,000.

This fraud is different from predatory lending, in part because Sally never made a loan. Predatory lending typically involves a single loan with extremely high fees and a high interest rate made to a homeowner or legitimate purchaser. Mortgage fraud for profit is typically a more complex scheme involving an inflated appraisal, falsified loan applications, equity skimming, property flipping, and sometimes identity theft. The borrower is typically a straw buyer, who never intends to occupy the house. The mortgage payment is paid by the investor, or a company controlled by the investor. Eventually, the investor stops making mortgage payments, forcing the lender to foreclose, or sells (“flips”) the house for additional profit.

In a typical mortgage fraud for profit scheme, a bird dog looks for distressed houses by checking public real estate records and driving around targeted neighborhoods. When a house is identified, the bird dog reports the address to the investor and receives $1,000 or so for the service. A straw buyer, who is a person with good credit or a falsely inflated credit score, poses as a buyer. In some cases, a straw buyer is a stolen identity; the person whose name is stolen may discover the theft when credit is denied or the purchase appears on a credit report. In some cases, a straw buyer is a participant in the scheme – a professional straw buyer. In many cases, however, a straw buyer is a person who hears by word of mouth through family, friends or co-workers that someone will pay $5,000 to $10,000 for the use of his or her name. As with most financial arrangements that seem too good to be true, a one-time straw buyer often finds that things do go wrong: his credit may be ruined because the mortgages are not paid, he may be investigated by law-enforcement for fraud, or he may be charged with conspiracy.

In addition to bird dogs and straw buyers, a mortgage broker and appraiser are important participants in a mortgage fraud for profit. Usually, both are active participants in the scheme and receive money for falsifying documents. Other industry professionals who play an important role are employees of a title company who create closing documents and disburse funds after a sale is completed. Professionals who have access to credit report databases or software that generates W-2 forms and pay stubs also participate in the scheme. As reported in the 2006 FBI Financial Crimes Report, 80 percent of all reported mortgage fraud losses involve industry insiders. Perhaps this is why mortgage fraud for profit has become so prevalent throughout the country. A homeowner facing foreclosure is easily convinced by a professional mortgage broker, for example, that he should sign contracts that convey his house to someone else. People tend to trust professionals in the financial industry. This is one of the reasons that government regulations requiring financial industry professionals to maintain specific standards are so crucial for the protection of consumers.

Hopefully you found this article helpful, it was provided by JVM Lending, the leader in CA Home Loan and CA Mortgage loans.

Spread betting was initially started back in the 1940’s by a math teacher turned bookmaker in Connecticut called Charles McNeil. It was only in the 1980’s that the idea caught on in the UK but since the, it has become very popular and there are many different ways of going about spread betting.

In the early days of spread betting, there was no such thing as the Internet and as with most industries the spread better market today has been changed significantly with technological advances. Having the internet enables spread betters to do far more and has proved to be an invaluable tool.

Nowadays, beginners have far more advantages than those learning to trade would have had. Spread betting companies have ‘dummy’ accounts that permit you to place paper trades and practice placing bets, allowing you to see how you would have done had you placed the trade in real life. In this way, you can establish up your knowledge and your confidence without losing your trading pot.

When it comes to placing real life trades, there is no reason why anyone wishing to place a trade should miss out on an opportunity. An online account is approachable from almost anywhere in the world, so you can place a bet or check on the progress of existing spreads in a matter of minutes. Spread bets can be placed online and even via your mobile phone nowadays.

The opportunities for placing trades have also increased. You can trade foreign currencies or stocks and shares, which are fairly commonplace, or you can be a little more strange and place spread bets on others markets, including sports areas such as the World Cup or the British housing market for example.

With all these changes, it is tentative whether Charles McNeil would even recognise the spread betting market today.