Rise in Fraud Complaints Brings State Scrutiny, Plan for New Rules


Home loan practices probed

August 31, 2008

By Ben Szobody – Greenville News

Home foreclosures and mortgage fraud complaints continue to increase as state officials say they’re investigating mortgage activity in the Upstate and preparing legislation that will bring murkier parts of the mortgage lending business out of the shadows for the first time.

It’s still impossible to track the total complaints and confirmed cases of mortgage fraud in the state, in part because there’s no clearinghouse and because not all parts of the lending business are currently required to have a license.

By one national measure, 20 percent of foreclosures include some element of fraud, said Charles Knight, staff attorney for the state Department of Consumer Affairs. The department’s mortgage fraud hotline, which opened in June, fielded 180 calls in its first six weeks.

Knight said it’s the tip of the iceberg. He declined to discuss the current Upstate investigation, except to say that it is ongoing.

One in every 621 South Carolina properties had a foreclosure filing in the second quarter of this year, or one in every 492 housing units in Greenville County, according to tracking firm RealtyTrac.

Assistant U.S. Attorney Kevin McDonald said his office has prosecuted between 80 and 90 people for mortgage fraud in the last five years, including one case in Greenville against business owner Kyle Wimmer, who has pleaded guilty to bank fraud and money laundering, court records show.


The increases in fraud involving appraisals has resulted in a recent “flight to quality” in selecting appraisers for many banks. IRR-Residential has a multi-layered review process that provides greater protection against fraudulant activities. Bank can be assured that appraisals will be performed locally, reviewed locally, and then reviewed again at the corporate office level. Our appraisal services aren’t right for all banks, but many who have made the commitment to only accept high quality reports have chosen IRR-Residential.
Read more about IRR-Residential at the link to the right.

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