Lest your toil be for naught dear borrower, check out this story reported on Crib Chatter today that picks up on a report from Reuters about the scam running over by Back of the Yards.
How big is the problem?
In its first-quarter report, Interthinx said its Mortgage Fraud Risk Index rose 4 percent to 151, the first time it had passed 150 since 2004. A figure of 100 on the index would indicate virtually no risk of fraud.....Back of the Yards -- ZIP code 60609 -- had an index of 309.
So basically, the wicked scammers found a way to exploit lenders even with their newly improved, more rigid underwriting systems, and loan guarantors (FHA, Fannie Mae, Freddie Mac) (taxpayers) will continue to eat the losses. In the mean time, legitimate borrowers will still have to dot all I's, cross all T's, and show receipts for their last three ATM withdrawals, with letters of explanation for the use of those funds.