The Great Recession has had a profound effect on American life. With so many millions of homes lost to foreclosure, and so many millions of jobs lost, the effects have been incredibly far-reaching — and are far from over yet.
With changes on such a scale, crime patterns have of course been affected too. At first, when the Recession hit, many experts predicted that crime rates would go up. That generally didn’t happen, however, causing experts to rethink their theories.
But the Recession has also affected specific crimes. Mortgage fraud, for example, is far less frequent now than it was before the real estate crisis hit in 2007.
Back then, there was tremendous pressure in the real estate industry to approve loans as soon as possible. This was true even when traditional underwriting standards had not been met.
Eventually, that pressure backfired terribly, as the collapse of the market for subprime mortgages precipitated a wider real estate and financial crisis that in turn triggered the Great Recession.
Today, the country continues its efforts to find a sounder, more sustainable economic path. The real estate market is recovering in many parts of the country, though many homeowners remain underwater on their mortgages.
And mortgage fraud? A recent report from the firm CoreLogic found that, in St. Louis, 18 mortgage applications out of every 1,000 are considered fraudulent.
Inaccurate information in an application is sometimes inadvertent. But if property valuations have been deliberately faked, that could give rise to an investigation for mortgage fraud.
Such investigations have become less frequent in recent years though, in the wake of the Recession.
Source: St. Louis Business Journal, “How bad is mortgage fraud in St. Louis?” Greg Edwards, September 25, 2013