Including losses from lawsuits, mortgage-backed securities litigation and taxpayer bailouts, the housing crisis has cost the nation nearly $13 trillion, according to analytics firm Interthinx, which reported the data at the Mortgage Bankers Association’s Risk Management and Quality Assurance Forum in Dallas Sept. 11, HousingWire reported.
When tallying up only real estate-owned properties, short sales, lawsuits regarding residential-mortgage backed securities and crisis-related litigation, the meltdown cost the mortgage and housing industries around $2 trillion, Ann Fulmer, vice president of industry relations for Interthinx, told the conference, HousingWire reported.
Fulmer added that U.S. taxpayers and the government lost $3 trillion, while losses tied to homeowner equity reached approximately $8 trillion.
“If that becomes the standard, then that is going to be the problem area. People will be making it (the down payment) up or manipulating the cash value, and if you don't get that right then your loan-to-value ratio is going to be off,” Fulmer told the conference, HousingWire reported.
Fulmer compared the $13 trillion to the U.S. gross domestic product — the nation’s entire output of goods and services hit $15 trillion in 2011.
“We did not pay attention to data integrity on the way up, and so we have wiped out almost an entire year of gross domestic product in the United States,” Fulmer said, HousingWire reported.
Fulmer’s advice for how data analysts should search for potential fraud in the future to prevent such overwhelming losses is to “follow the money” when dealing with compliance on the loan origination side, HousingWire reported.
According to Fulmer, areas that require close attention include down payment funding and sources, income and employment, assets and liabilities and collateral values.