Charged with mortgage fraud, 57-year-old David Glen Helton is accused of a mortgage scam involving seven or more senior citizens of Marietta. Allegedly, he used false identifications to obtain the fraudulent mortgages without any intention of paying for them.

The victims’ mortgages were paid off prior to the fraud. The owners knew nothing about the plot until notified by lenders of eviction proceedings.

This is not an isolated incident, folks. On the contrary, mortgage fraud is at an all-time high.

Based on figures from the Mortgage Asset Research Institute (MARI), mortgage fraud climbed 26 percent in 2008 from the previous year. MARI, a LexisNexis Service, compiled the data for the Mortgage Banker’s Association.

Georgia is fourth in the nation for mortgage fraud, preceded by Rhode Island, Florida and Illinois, accordingly. Crooks are becoming craftier in how they commit mortgage fraud. Living in the fourth highest state known for mortgage fraud should make Georgia citizens to take notice and become familiar with the tricks of the trade.

As you can see from Helton’s actions, you can have your home subject to mortgage fraud without your knowledge. It appears that Helton’s scheme wasn’t discovered by the lenders until the homes were in foreclosure, and they put two-and-two together.

The motivation behind mortgage fraud is always one of two things – to make a quick buck or to buy a home, AKA fraud for profit or fraud for housing. There are varying applications of each.

So many hands touch the mortgage process that it is sometimes not that difficult to commit fraud. Here are some examples of how mortgage fraud works:

• Fraud for Profit – perpetrators commit fraud in attempts to make a quick buck.

• Helton revealed one way to do it. Use a false identity and documentation to obtain the loan.

• Fraudster finds out that a homeowner will be gone for an extended period of time

Gets access to the real estate and presents home for sale at a very low price to push through a short sale.

Fake documents are shown to potential buyers and lenders to prove the property is free of liens.

The unsuspecting buyer purchases the home only to discover the fraud.

• Foreclosure rescue scams –

Bait and Switch – You sign what you think are new loan documents, when, in fact, the documents enable the scammer to take the home in exchange for “rescue” funds. You lose the home and you’re out the fee.

Rent to Buy Scheme –

• A. Buy home from you and promise to let you buy it back over a period of time. Rent is raised that makes it impossible for you to keep up the payments. You are forced out due to non-pay and the scammer is free to sell your home on the market.

• B. Buy home from you and promise to let you buy it back, but sell it out from underneath you.

Bankruptcy Foreclosure – Scammer promises to bargain on your behalf with your lender to obtain refinancing if you pay an upfront fee. Fraudster pockets the fee, files bankruptcy in your name, which often delays the foreclosure process for a time. You end up losing your home and the bankruptcy can stay on your credit report for up to ten years.

• Builder Fraud – Builder accepts payment to build, then takes off with the money.

• Other scams – Lenders, brokers or real estate agents, appraisers, investors, homeowners, home builders work together in some capacity to inflate home prices on appraisals to obtain loans for more than the home is worth. They pocket the difference.

• Fraud for Housing – homeowners commit fraud in attempts to purchase a home.

• Application Fraud by Homeowners – most prevalent mortgage fraud

Inflate income in order to obtain financing for a new home or upgrade.

Provide misleading tax returns and financial statements.

Lie, saying they are laid off, in order to refinance mortgage

• Manipulate documents relative to escrow and closing, verification of employment, verification of deposit and credit reports.

There are lots of other ways that scammers are scheming to make quick cash. For more information on how to avoid mortgage fraud, check out the Federal Trade Commission (FTC) website.