Mortgage fraud worse in nearby states

By Brian Eckhouse (contact)

Monday, May 26, 2008 | 2 a.m.

Nevada might be among the worst-hit states for housing foreclosures, but if it’s any consolation, other states are suffering more from mortgage fraud.

Nationally, mortgage fraud has jumped by 31 percent to 46,717 cases during the 2007 fiscal year, according to a report issued this month by the Federal Bureau of Investigation. The authors of the report theorize that the slumping housing market “provides an ideal climate for mortgage fraud perpetrators to employ a myriad of schemes.” Fraud was documented in such transactions as builder bailouts, seller assistance, short sales and foreclosure rescue. Identity theft that exploits home equity lines of credit was also all too common.

Unlike California and Colorado, Nevada did not fall within the top 10 mortgage fraud states in 2007, but the state was cited as “significantly affected.”

It’s not entirely clear how pervasive the problem is in Nevada. Local FBI officials declined to specify. But in the mortgage fraud category of home loan fraud, Nevada was the second-worst state, up from sixth in 2006.

However, the subprime mortgage crisis and the spike in foreclosures are key factors in the surge in fraud.

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Whose idea was it to tap CNN anchor Lou Dobbs to speak to a group of developers who largely think the economy’s poor health has been grossly exaggerated by the mainstream media?

The United States, Dobbs told attendees May 18 at the annual International Council of Shopping Centers, no longer is a superpower even with the nation’s unrivaled stockpile of nukes and warheads. Calculating a nation’s strength based on artillery is anachronistic, Dobbs argued. Economic muscle, he suggested, is the key prerequisite for superpower status.

His evidence of America’s economic struggles included more than just the recent letdown: the tech bubble of the late 1990s, the housing bubble, among other bubbles, as well as more than three decades of trade deficits. (But his argument of a sullen economy was weakened somewhat by the preregistration figures at the convention, which were within 40 of last year’s 42,944).

Without bold intervention, Dobbs said, he doubts our status will improve markedly.

He argued that a laissez-faire sentiment is to blame, specifically “a libertarian default to Mr. Market.”

The media and the three remaining presidential hopefuls, Dobbs claimed during his often rambling speech, have neglected the real issues — public education that “isn’t working,” considerably reduced “participatory democracy” at local levels and a need to fund $1.7 trillion in infrastructure upgrades — in favor of stories that serve one or two news cycles, including last week’s debate over whether American leaders should talk to the enemy.

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As if the overall economic downturn weren’t causing enough worries for the Las Vegas tourism industry, some pundits are predicting that a gallon of unleaded gasoline will break the $5 mark by the end of the summer.

CNBC’s Jim Cramer, speaking on Wednesday’s “NBC Nightly News,” said prices might even shoot up to $6 in the next few months.

And between Memorial Day weekend and July 4, the price almost always jumps anyway, so a bigger bite at the pumps in the coming weeks is a sure bet.

Rising gasoline prices throughout the region are always a concern for Las Vegas because many tourists drive to Southern Nevada, particularly from Southern California. The price for a gallon has soared well past $4 at most filling stations along the coast in San Diego County.

Michael Geeser, spokesman for the Nevada chapter of the AAA, says his organization remains skeptical about whether gas prices will shoot up by a couple of bucks per gallon this summer.

“Something different would have to happen, something dramatic,” to cause that much of a spike in such a short time — something akin to Hurricane Katrina, he said.