Many suspect it, although no one can say for sure if shady real estate transactions in Hernando Beach amount to mortgage fraud. But it is time to be certain and that will require an investigation by law enforcement authorities.
There are both federal and state laws against mortgage fraud and that means both the Federal Bureau of Investigation and the State Attorney's Office have the authority and, with mounting circumstantial evidence, the grounds, to launch a probe.
As detailed in a Sunday story by Times reporter Dan DeWitt, there have been numerous suspicious sales of houses in Hernando Beach. All changed hands during a short period of time, all sold for much more than they were worth, and all were secured with inflated mortgages. And most wound up in foreclosure. The prices of some Hernando Beach properties were so skewed that the Hernando County Property Appraiser's Office removed them from the mix when calculating property assessments in that area.
While the people involved in such dubious transactions are enjoying their profits, they are creating a financial burden for nearby homeowners who must pay higher taxes because their property assessments can be exaggerated by the artificially high sale prices. Also, the homes that are foreclosed on often become eyesores in the neighborhood.
The effect of mortgage fraud on the national economy is well-documented. Just last month, Tampa Bay was ranked as one of the Top 10 areas in the nation for suspected mortgage fraud. Coastal Hernando County is a prime example of the ripple effect of such dishonest behavior.
Investigating mortgage fraud is complicated and time-consuming. There are so many levels at which the crime can be carried out - unscrupulous appraisers, real estate agents, lenders, and mortgage and title companies - that it can be very difficult to prove when the people involved are unwilling to point fingers at their accomplices for fear of incriminating themselves. But, as problematical as that may be, it should not deter law enforcers from doing their best to expose it and bring the offenders to justice.
And even if an investigation does not result in indictments, it still furthers the public interest by shining a bright light on a shadowy problem, which clearly imperils the economy and undermines residents' trust in the local housing market.