In a post a few weeks ago, about some of the assumptions around the financial crisis, I wondered what proportion of foreclosures and mortgage defaults are homeowners who honestly got screwed by greedy brokers and bankers, versus informed buyers who knowingly took risks and simply lost that gamble. I wasn't even really thinking about outright fraud but a recent post on Citizen Economists certainly has me thinking about it now. It's a fascinating post about the increase in mortgage and foreclosure fraud, including a very nice explanation of exactly how such fraud can be perpetrated. In the comments, SteveP claims to have reviewed hundreds of foreclosures in Florida and Georgia and found that over 70% were fraud scenarios. I'd like to see more rigorous and comprehensive analysis but thought this anecdotal data was certainly interesting.
Welcome new readers!
The "New to the blog? Start here" page will give you an overview of the blog and point you to some posts you might be interested in. You can also subscribe to receive future posts via RSS, Facebook or Twitter using the links on the right-hand side of the page, or via email by entering your address in the box. Thanks for reading!