Two charged in Houston mortgage fraud scheme targeting FHA loans
Application-level fraud risk has climbed 7.3% year over year as of Q1 2025, according to Cotality. By the close of Q4 2025, the company’s National Mortgage Application Fraud Risk Index stood at 133, equivalent to 1 in every 118 applications carrying fraud indicators, up from 131 in Q4 2024.
Matt Seguin, senior principal of fraud solutions at Cotality, previously told Mortgage Professional America about the warning signs of mortgage fraud at origination that the evidence is frequently embedded in the documents themselves.
“You have documents like pay stubs and bank statements where you’re able to look at mailing addresses and see whether something lines up from that perspective,” he said.
Each defendant faces up to 20 years in prison and a possible $250,000 fine for conspiracy to commit wire fraud or wire fraud, and up to 30 years and a potential $1 million fine for making false statements to a mortgage lending business.
The investigation was conducted jointly by the FBI, the Federal Housing Finance Agency (FHFA) – Office of Inspector General, and HUD-OIG.
