“As the mortgage industry heads into the latter part of 2013, the housing market is showing signs of positive growth. According to the National Association of Realtor’s (NAR) Pending Home Sales Index (PHSI) which is based on purchase contracts, in May 2013, pending home sales were at their highest since late 2006. When combined with the lessening volume of available inventory in most areas, this could signal an interesting new origination year for most lenders. At the same time, lenders continue to work through backlogs of loan modifications and short sales—a trend that has made loan modification fraud, short sale schemes, and foreclosure rescue fraud part of the nation’s vocabulary. Both the industry and regulators are currently focused on reputational risk. In an attempt to protect both industry investment and consumer financial obligations, the Consumer Financial Protection Bureau (CFPB) recently released new mortgage regulations that emphasize loan and borrower quality. The first round of these regulations goes into effect in January 2014 and outlines rules for quality loans. It remains to be seen whether additional regulatory action like that taken by the CFPB will strengthen loan standards enough to see a marked decrease in defaults. If new home originations continue to climb after these quality guidelines are in place, what will the effect be on mortgage fraud?”