Mortgage fraud apparently rose again last year, and this could be bad news for the real estate investing world. This might result in home buyers being too careful when buying houses or mortgage companies being too stringent when approving loans. Fraud cases, according to the report, increased 7% last year. The positive thing is they eased significantly from the 26% rise back in 2008.

The report also indicated that one of the more prominent types of fraud possibly involved real estate investors. Known as “false occupancy claims,” it’s a case wherein the buyer claims he will reside in the home but he actually is buying it for investment purposes.

It’s already unfortunate that culprits are still preying on mortgage providers. What makes it worst though is that the real estate investing world is being tugged in the cases. This could give the impression that real estate investors practice fraudulent methods just to get by. Now, investors who do their business legitimately could be the subject of criticism and discrimination just because some culprits wanted to earn money fast.

For real estate investors who are tempted to do their business the easy but wrong way, think again! There are laws that penalize people who commit fraud. With your act, the whole real estate investing community might be affected. So again, think twice! Hopefully time will come when fraudulent practices no longer exist.

Now, for additional information for real estate investors, Florida led the states with the most number of mortgage fraud cases. Hardest hit by the housing crisis, the state registered a mortgage fraud index reading of 292. New York (217) and California (159) complete the top three.

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