The Washington Post reports that a man in Arlington County Virginia was surprised to receive notice that he had overpaid his second mortgage http://www.msnbc.msn.com/id/20044213/ because . . . he did not have a second mortgage. It turns out that a thief had stolen his wallet a year earlier and had used his identity to buy a $419,000 house with no money down! Fortunately, this identity thief had something of a conscience and had been making regular payments on the loan so the identity theft victim did not have irreperable damage done to his credit; little consolation in light of the circumstances.
While identity theft is routinely linked to empty bank accounts and maxed out credit cards, this is the first I’ve heard of it resulting in a home purchase. The thief in question will surely serve time for the crime committed, but the theft itself was so audacious that it should have been caught by the lender. While perhaps there are facts that have yet to be revealed about how this could have happened, Its occurence is symptomatic of the overeager “predatory” lending environment that currently exists. Had the lender taken the simplest of steps to verify the identity of the applicant, this situation could have been averted before the damage was done and the identity thief moved into her new home.