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By Ralph R. Roberts

Over the past decade, I have seen fraud rot the very foundation of our industry, but what upsets me most is that 80% of fraud involves industry insiders-professionals who earn their living from this great industry. Every day, I see cases in which real estate agents, loan originators, mortgage brokers, appraisers, and other industry insiders play an active role. But the people who could stop it often choose to look the other way.

Let’s review statistics from housing’s peak year in 2005 to the end of 2007:

Anyone can see the fallout from this greed; fraud has hurt everyone. The value of the dollar has plunged, global stock markets are fluctuating wildly, the U.S. is on the brink of one of the worst recessions since the Great Depression, our neighborhoods are crumbling under the weight of foreclosure, and economists are warning of a global recession.

Yet, the people committing fraud have not curtailed their activities. If anything, they have ramped up their efforts to cash out before nothing is left. Honest citizens and real estate professionals continue to look the other way.

In order to stem the tide of real estate and mortgage fraud (the fastest-growing, white-collar crime in America), we need to realize that those committing fraud threaten our very livelihoods. The crimes that a minority of professionals in our industry are committing fuel distrust among consumers, tarnish our reputations, and undermine our integrity. We need to pledge allegiance to the American dream of homeownership and fight back.

To regain control of our industry, we must first pledge to not go along with questionable transactions. This is tough. When the guy or gal down the street is willing to go along with a scam in order to earn the commission, acting with integrity can hurt your short-term business. This is why the second pledge is so important: to report suspected incidents of fraud.

When you see the asking price for a home that has been sitting on the market for six months suddenly shoot from $350,000 to $500,000, and then sell the next day, you should become more than a little suspicious. Do not look the other way. Call your local FBI and report it (to find the number for your local FBI office, visit

If something suspicious occurs at the closing, ask to speak with the manager of the title company. Explain what you are concerned about and request the phone number for the lender. Every closing packet has a phone number to call for funding approval that will get you in contact with a real person rather than an automated system. Call the number and explain what’s going on.

Do your part to clean up the industry. Spot the signs. Stop the fraud. RE

Ralph R. Roberts is a real estate fraud expert and activist, and co-author of Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership (Kaplan, August 2007). For more about real estate and mortgage fraud, visit