The Portland office of the Federal Bureau of Investigation (FBI) and the U.S. Attorney’s Office today announced expanded efforts to identify and prosecute mortgage fraud. As part of a multi-agency approach, special internet and phone tip lines have been established to handle reports of mortgage fraud. Investigations will be handled by the Oregon Mortgage Fraud Working Group, which has been operating since 2007, and continues to tackle mortgage fraud on multiple fronts.
Since 2007 the U.S. Attorney’s Office in Oregon has brought charges or secured convictions in more than a half dozen major mortgage fraud cases resulting in sentences of up to 10 years in prison. These cases have been successfully investigated by the FBI, Internal Revenue Service, U.S. Postal Inspection Service, U.S. Secret Service, Oregon Department of Finance and Corporate Securities, and other federal and state law enforcement agencies. (See the list of the Oregon Mortgage Fraud Working Group member agencies below).
Virtually all mortgage fraud cases involve false representations on mortgage loan applications. The typical case involves falsification of income, liabilities or employment on a loan application, and often includes a fraudulently inflated property appraisal. The majority of the Oregon Mortgage Fraud Working Group investigators are working major cases involving multiple suspects, multiple borrowers, and millions of dollars in fraudulent loans.
U.S. Attorney Karin J. Immergut stated, “We need the public’s help to bring foreclosure scammers and mortgage fraudsters to justice. Needless to say, mortgage fraud hurts everybody.” “With the current economic climate, we know many people are hurting,” said David Ian Miller, Special Agent in Charge of the FBI in Oregon. “This makes people in our community vulnerable to false guarantees and frauds.”
The Oregon Mortgage Fraud Working Group also focuses on emerging crime trends that are associated with the growing tide of foreclosures:
Foreclosure Rescue Schemes
One of the biggest threats for consumers now is unscrupulous “foreclosure specialists.” These con-artists prey on desperate homeowners by persuading them to sign over the deeds to their homes to a “specialist,” who promises that the homeowners can stay in their homes, make “rent” payments, and eventually re-purchase their homes. In many cases, the “rent” payments, which are supposed to go to the mortgage company, are never sent. Instead, the “specialist” illegally retains the payments along with extra fees. The homes continue into foreclosure, and the homeowners suffer additional losses. In other situations, the “specialist” steals the equity in the home by re-financing it without the homeowner’s knowledge, fails to pay the new mortgage, and then the home ends up in foreclosure.
Homeowners must be alert to avoid scams and are urged to do business only with companies that they know are trustworthy. To see a list of housing counseling agencies approved by the U.S. Department of Housing and Urban Development (HUD) go to www.HUD.gov or contact the Better Business Bureau. Never transfer title to your property or give up personal information unless you are sure of whom you are dealing with.
A second area of concern growing out of the increased volume of foreclosures involves “short sales.” In a short sale scheme a buyer purchases a home with no intention of making payments. Often additional funds are included in the purchase loan for planned “improvements.” The buyer pockets that money. After a few months, the buyer informs the bank that the house will foreclose. The buyer presents a possible pre-foreclosure buyer who, unknown to the bank, is a part of the fraud. This second buyer offers to purchase the home at a price below the current loan amount. The lender agrees, unaware that the first buyer deliberately failed to make the payments in order to set up the short-sale situation. Sometimes the fraudulent buyers damage the house to further justify the lower offer. After the deal closes, the buyers repair the damage, get the home appraised at a higher level, and re-sell it for a profit.
Tip Line and Website
Citizens are urged to report any mortgage fraud activity or information by contacting one of the following:
Portland FBI’s website at http://portland.fbi.gov
Phone Tip Line: 503-273-5813
Email Tip Line: firstname.lastname@example.org
For more details as well as tips on avoiding trouble or getting help if you are facing foreclosure, please see the FBI’s website at http://portland.fbi.gov.
The Oregon Mortgage Fraud Working Group includes the following agency members:
U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service, Criminal Investigation; U.S. Postal Inspection Service; HUD Office of Inspector General; Office of the Trustee U.S. Bankruptcy Court; Oregon Department of Justice; Oregon Division of Finance and Corporate Securities; Multnomah County District Attorney’s Office; Washington County District Attorney’s Office; Clark County Prosecuting Attorney’s Office; Portland Police Bureau; Vancouver Police Department, Clark/Skamania County Drug Task Force.