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By Ralph Roberts

RISMEDIA, Jan. 11, 2007-At industry events lately, real estate professionals gather to talk shop and discuss market trends for 2007, but I notice that nobody's talking about the elephant in the conference hall. We're predicting the health of the market. We're exploring new technologies. We're trading secrets. We're swapping ideas and business cards. But the silence over what I believe is a looming foreclosure epidemic, is deafening. Nobody utters the words-"flipping," "fraud," or "foreclosure." It's almost as if these three words have been banned from the industry.

I've attended dozens of conferences, and very few of them schedule sessions devoted to real estate and mortgage fraud. The topic tends to have more of a following at conferences for mortgage bankers. Perhaps real estate professionals are simply too busy helping their clients buy and sell houses, or they find the topic less stimulating than others.

By not paying sufficient attention to real estate and mortgage fraud, however, we've become blind to the fact that illegal flipping, cash back at closing, and other forms of real estate and mortgage fraud are chipping away at the very foundation of the real estate industry, leading to shameful foreclosure rates that only promise to become tragically worse. While we're discussing lead generation, marketing techniques, and the power of blogging, absent from our discussion is any mention of what to do to protect the homeowners, our clients-the people who butter our bread.

What is currently happening in the real estate and mortgage industry can only be described as the perfect storm. Fraudsters are ripping off lenders and homeowners with impunity. Artificially inflated housing values are soaring, and with them, so are property taxes and insurance premiums. Lenders are losing billions to fraud and then turning around and ripping off homeowners by selling them adjustable-rate mortgages and other high-interest loans they can't possibly afford. And personal income just isn't rising fast enough to keep up with the market. Strapped-for-cash homeowners are beginning using their homes as ATMs, mortgaging themselves into foreclosure and bankruptcy.

Yet, few real estate professionals express any concern. They continue to carry on business as usual, and often "business as usual" includes actively participating in the fraudulent activities that threaten the American Dream of homeownership. In fact, the FBI ( estimates that 80% of all real estate and mortgage fraud involves industry insiders!

We need to turn these numbers around in a hurry before our entire industry collapses. We need to wake up and realize that our clients-average homeowners-are hurting. We need to recognize that fraud is destroying the very industry that feeds our families and that it directly contributes to the rising foreclosure rates around the country. We need to educate ourselves and our clients, and then take action to spot, stop, and post fraudulent transactions that we witness, regardless of whether the person committing fraud happens to be a client, colleague, friend, or family member.

If we fail to take action now, none of us will have the right to complain when our children and grandchildren cannot afford to purchase a house, when our friends and relatives have their homes stolen right out from under them, and when our businesses crumble because the average citizen cannot afford a home.

I would like to see future conferences focus a little more on that elephant we all seem to be ignoring.

Ralph Roberts is a real estate fraud expert and activist and author of Flipping Houses For Dummies. Visit or contact Ralph at or 1-586-751-0000.