As the economic melt-down continues, people are trying to find more and more ways to make quick and (sometimes) illegal money.

If you search the internet, you will see how more and more people who committed fraud are being tracked down. State and Federal Agencies are trying the best they can to prosecute those that hurt major financial institutions and everyday homeowners. Back in December 2008 the FBI created a national mortgage team and even doubled the agents that were assigned to this type of crime.

Below are some common frauds that have happened so far. Although the fraud types below are not new and have been around for years, many have only heard about these cases. This is because the current financial situation that pushes even more people to commit them considering that homeowners in financial distress are easy targets. As more and more companies are reporting fraud more frequently, the state and federal agencies are stepping up enforcement.

- Income and Employment Fraud: In some cases it is the homeowner who lie about their employment or income. In fraud cases, loan brokers change or falsify documents to get the loan approved. This causes the homeowners to not being able to pay back the loan.

- Reverse Mortgage Fraud: While reverse mortgage can be a helpful tool for elderly people, government officials have warned them about people who are charging very high fees. In some cases, elderly people are cheated by high fees. In others they lose their house because they signed documents they did not understand.

- Mortgage Related Identity Theft: Scammers use stolen identities and apply for a mortgage to buy properties.

- Foreclosure Help: Fraudster offers help to save a home from foreclosure. They charge a fee for the service but doesn’t do anything but pocket the money.

- Lease Buy-Back: Homeowners who are facing foreclosure sign over the deed to the fraudster who promises to sell it back after a year or so. The time period varies, depending how fast the homeowner can get their finances together. While they are sorting out their finances, they are allowed to rent the house and stay there. The fraudster then keeps the property or even sells it.

- Bait and Bump: Desperate homeowners are offered attractive loans by lenders. As the time to close is near, they are told that it is too late to switch. This leaves the homeowners with mortgages they can not repay. In some cases, homeowners sign away their homes.

Federal agencies are currently investigating these types of fraud. These includes the FBI, the Secret Service, the Department of Housing and Urban Development and the IRS. The Congress is also considering adding $35million to the FBI’s budget for fraud detection. Although it seems that a lot has been done by the government and federal agencies to protect homeowners, it is always wise to be careful in choosing your mortgage companies.

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