President Obama’s administration released a report from a year long mortgage fraud initiative conducted by the FBI. This probably hits home with many MLS who have been cooperating with FBI investigators who are using MLS data to detect potential fraud. Sadly, the report was found to be way, way out of line, overstating the scope of the problem by significant margin.
- According to the initial report, the FBI indicated that they had criminally charged 530 people. The restated report indicated that they only charged 107 people.
- According to he initial report, the FBI indicated that total losses from the fraud were estimated at $1 Billion. The restated report indicated that the total losses were about $97 million.
- According to the initial report, the FBI indicated that the total number of victims were 73,000. The restated number of victims was 17,185.
Here is the even better part. In 2011, the FBI indicated that fraud was $10 Billion! View the release here http://waves.wavgroup.com/2011/08/12/fbi-targets-realtors/
There is an interesting back story to the restated report. As many MLSs may recall, the initial mortgage fraud program was conducted by the Consumer Financial Protection Bureau. The Obama administration moved the mission to the FBI. When the report was released, the Consumer Financial Protection Bureau was shocked. They knew the low frequency of fraud they had uncovered, so they fact checked the FBI report and found the errors. Apparently, the original FBI report issued was based upon a “survey” rather than a count.
“Please be sure to update any online materials posted by your agencies to reflect these changes,” the FBI told the other agencies in the memo.
I hope everyone got the memo.
Bloomberg put out a nice story on this. Many thanks to Phil Mattingly http://www.bloomberg.com/news/2013-08-09/u-s-mortgage-group-forced-to-correct-initiative-stats.html