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- Trouble Brewing - Mortgage Fraud Losses Could Spike 🔥
Trouble Brewing - Mortgage Fraud Losses Could Spike 🔥
Frank McKenna
April 22, 2025
Hi Fraud Fighters đź‘‹
Mortgage fraud may have dropped 36% last year, but that isn’t stopping the US government from purging fraud from Fannie, Freddie, and the FHA.
Although mortgage fraud has been a relatively low-key crime for a few years, expect a significant spike in repurchase demands on banks and lenders as the agencies begin looking for ways to purge losses and fraud.
Let’s get to it.
This Week’s Top Fraud Snippets
Spreading Like Cancer - A UN report warns that Asian scam centers are proliferating worldwide after a crackdown in Pig Butchering operations in Myanmar have bosses running for the hills. Read More
“Hello Pervert” Scam - a new wave of sextortion scam messages that start off with, “As you may have noticed, I sent this from your email account” are appearing and causing alarm. Read More
Gutted - The CFPB has started to lay off 1,500 of their 1,700 staff, absolutely gutting the agency of 90% of its staff. Read More
Really? - A new survey has found that checks are surging among businesses (even as fraud soars), with 91% of companies now writing them, up from 75% last year, and many say they have no plans to curb their use. Read More
Hitting Pause - Big banks are pulling back on sending electronic filings like SAR reports to the OCC after the recent massive breach. Read More
Scallywag Arggh - A security company uncovered a massive digital piracy scheme routing people to over domains serving up 1.4 billion ads for pirated content. Read More
Fraud Startup Founder Confesses - The co-founder of Fraugster reveals that his greatest mistake at the company was using a complex fraud approach versus relying on proven, good old-fashioned LogReg models. Interesting read from a founder. Read More
Strange AI: A man’s phone routes every call to a strange AI bot that he thinks is trying to scam him. Fraud Fighters, does this mans phone have malware on it, you be the judge. Read More
Deepfakes Merged Scammers’ Faces To Real Identity Cards, And They Looted Banks
Banks' Know Your Customer (KYC) Checks are under attack. This time, the fraudsters won.
A report out of Hong Kong reveals that Triad Gangs merged their facial features on stolen identity cards to create convincing deepfakes that fooled multiple banks.
The fraud ring used genuine identity cards that victims reported having lost across the country. Using that information, they applied for 44 different bank accounts and then used AI to alter the real identity cards by merging the scammers' facial features into the photos.
The technique was successful, and they were able to bypass the KYC and selfie checks on 30 of the 44 bank accounts they applied for.
Frauds New Frontier: Retailers Battle With Tariff Dodging
Americans are being recruited by Chinese merchants to serve as front operations for overseas businesses trying to avoid steep import tariffs.
According to fraud expert Karisse Hendrick, this and a host of other tariff-dodging schemes are rapidly emerging in the merchant world.
She uncovered the trend after talking with dozens of retail executives who were grappling with the aftermath of the recent 125% tariffs on Chinese goods.
Repurchase Demands For Mortgage Fraud At Banks And Lenders Are Going To Spike
Mortgage fraud suspicious activity reports plummeted 36% last year, but that isn’t stopping the Federal Housing Finance Agency (FHFA) Director Bill Pulte from saying fraud is running rampant at the agency.
They fired 100 employees last week for fraud, and they recently released a Mortgage Fraud Hotline for people to report fraud.
Next up will be a wave of repurchase demands on lenders and banks as they scour through old loans and defaults looking for fraud on the applications so they can push the losses back to banks.
This happened in 2008 after the mortgage crisis and it is likely to happen again!
This Dealership Never Existed - AI Made It All Look So Real
The gleaming John Deere tractors on Dalton Tractor and Equipment’s website looked pristine, their prices low enough to attract a flurry of buyers looking to score a great deal. Their great deals on popped up on google searches when buyers were looking for used tractors and other farming equipment.
But the entire operation – from the pictures of the smiling staff, to the enthusiastic customer testimonials was just an elaborate ruse created by international scammers using cutting edge AI.
70 Minutes Is All It Takes To Create A Deepfake You Might Hire
Get this. It’s remarkably easy to create a deepfake candidate that you might want to hire on the spot.
Security Research company Unit42 proved this by giving a single researcher a basic, old computer and tasking him with creating an entirely fake person. He did it in a little over an hour, and it was drop-dead simple.
Dive deep into how North Korean IT workers are created and see just how easy it is.
Gotcha Glitchers! Chase’s Battle Against First Party Fraudsters Heats Up
If you tried to glitch the bank, they're still coming for you.
After winning all the lawsuits launched last October, Chase is at it again filing another wave of lawsuits against people that defrauded them - this time in state courts. People that stole under $75,000 are targets this time.
Chase reports that it has sent demand letters to over 1,000 people warning them to pay back the money before legal action begins.
New AI Is “FBI Level” Incredible At Finding Locations From A Single Photo
I think this could be called a case of good news and bad news. It gives investigators a powerful new tool, but it also puts the same capability into the hands of stalkers and criminals.
ChatGPT released a new AI reasoning model (O3) with stunning capability. It uses deep reasoning, internet searching, and powerful image analysis to reverse engineer the location of any uploaded photo.
I tested it on two photos. One photo guessed the correct address exactly. In the second photo, I uploaded a random photo outside an Airbnb I was staying at this weekend (in Tahoe), and it guessed the location within 1000 yards!
This may not have nailed the location exactly, but its scary how close it got.
Hacking CrossWalks With AI Voices Was As Easy As “1234” With Polara Field Service App
Last week, pedestrians across U.S. cities were startled when crosswalk buttons began speaking with AI-generated voices of Jeff Bezos, Mark Zuckerberg, and Elon Musk.
Well, it turns out that hack was surprisingly easy. Using the Polara Field Services app that technicians use to service streetlights, anyone could simply login and update the audio message that plays when the walk button is pushed.
The app was pulled from the App Store after the exploit was discovered.
Many Scams Are Now Tax-Deductible
A little relief for victims.
The IRS now states that scams involving any type of investment scheme are tax-deductible. That includes Pig Butchering, Cryptocurrency scams, and Ponzi schemes.
To qualify for the tax deduction, victims must have entered the transaction with a profit motive. Unfortunately, that does not include most romance scams, tech support scams, and other schemes.
The Queen Of Sextortion Scams: She Invented The Scam in 2013
Sextortion was invented by one woman in the Philippines, Maria Caparas. She turned the idea of making friends online and recording explicit video chats into a profitable blackmail and extortion scam that has resulted in many suicides across the world.
Many think the Nigerians invented Sextortion scams, but it is her template that they use to make millions.
That’s a wrap for another weekly edition of FrankonFraud.
Have an excellent fraud-fighting week.