Reader tips for the FBI on spotting mortgage fraud

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Responding to reports of the FBI’s ‘crackdown’ on mortgage fraud -- 144 cases nationwide in recent months -- readers here were unimpressed. Bill commented, ‘Heck, I could find 144 cases within a 10-minute walk of my house.’

Laker adds, ‘Funny, you don’t need FBI investigators spending months researching ... just check sales of houses in 2006, 2007 that got foreclosed within 12 months.’

In the spirit of public service, a couple of readers have pointed out a pattern they believe might indicate mortgage fraud.

I’ll go slowly: Readers of this blog believe a tell-tale sign of mortgage fraud is when a house sells at what appears to be a wildly inflated price. Then the house goes into foreclosure, or comes back on the market rather quickly, at a much lower price. These would be hints that the high sales price may have been fraudulent, creating a nice windfall of profit for the seller and the ‘buyer’ (who had no intention of paying for the house) to split when they walk away from said house. A ding to the ‘buyer’s’ credit score, but a nice windfall.

Here’s an example:
House sells in October 2004 for $800,000.
Same house sells again in August 2006 for $1.8 million.
House now for sale, listed at $1.1 millon.

Or:
House sells in February 2007 for $510,000.
House goes into foreclosure and is listed for sale at $279,000.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.