One area of fraud which is likely to undergo spectacular growth as the property market tanks over the next two years is mortgage fraud. Foreclosures in USA have been increasing at an alarming rate.You may have noticed in the news today an american timber company closing in southland.The reason given for the closure was the high nz dollar but more importantly the collapse of the property market in the USA. At present in New Zealand banks are reluctant to pursue mortgage fraud unless they have lost money. They simply get nothing from pursuing people through the criminal courts where they provided false information in order to borrow money.Mortgage fraud has been clogging up the serious fraud office over the last ten years but I tell you they have seen nothing yet.Mortgage fraud in New Zealnd will reach the level of fraudulent activity amongst listed companies after the last share market collapse. Because the banks are a party to such fraudulent lending by deliberately relaxing credit criteria in order to lend money to the total value of a property they will lose large amounts of money and then they will start bleating to the Serious Fraud Office.They will be completely snowed under with cases.All good news for lawyers I hear you say.Maybe. Call me!
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