Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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From March 1 to June 18, 2008, Operation Cash Back in Arizona resulted in six mortgage fraud cases in which 36 defendants were charged. 30 arrests were made in mortgage fraud-related cases in the Tucson and Phoenix areas. The FBI estimates that approximately $100 million in losses were inflicted by the mortgage fraud schemes employed in these cases. In Arizona, Operation Cash Back represents the collaborative efforts of the U.S. Attorney’s Office, FBI, Internal Revenue Service-Criminal Investigation Division, U.S. Immigration and Customs Enforcement, Department of Housing and Urban Development Office of the Inspector General, U.S. Marshals Service, Arizona Department of Financial Institutions, and the Scottsdale Police Department.
United States Attorney Diane J. Humetewa stated that “The individuals charged in these Arizona indictments are responsible for more than $100 million dollars in fraudulently obtained loans in Arizona. The investigation & prosecution of mortgage fraud is a top law enforcement priority & we are jointly committed to aggressively pursuing those involved in these crimes.”
“Over the last few years with the fluctuation in Arizona’s real estate market, too many individuals associated with this industry have exploited this market for their own personal gain. Innocent homeowners and businesses all across Arizona are paying a steep price for the selfish and illegal acts of others who attempt to capitalize on this market,” stated John E. Lewis, Special Agent in Charge, FBI Phoenix. “Mortgage Fraud is similar to other crimes which involve criminals exploiting innocent people and businesses for their own illegitimate gain. The FBI is dedicated to working with our law enforcement partners to combat this problem facing the lawful citizens of our state.” Operation Cash Back in Arizona is part of the nationwide Operation Malicious Mortgage fraud law enforcement effort. Nationally the Operation resulted in 144 mortgage fraud cases in which 406 defendants were charged. 60 arrests were made in mortgage fraud-related cases in 15 districts.
Nationally, the FBI estimates that approximately $1 billion in losses were inflicted by the mortgage fraud schemes. Mortgage frauds employ a variety of tactics including misrepresentations, deceit and other criminal abuses to fund, purchase or insure mortgage loans. Operation Malicious Mortgage addresses primarily three types of mortgage fraud schemes: lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes. Lending fraud frequently involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross fraudulent misrepresentations about the borrower’s financial status, such as overstating the borrower’s income or assets, using false or fictitious employment records or inflating property values. Foreclosure rescue scams involve criminals who target legitimate homeowners in dire financial circumstances and
fraudulently collect fees for foreclosure prevention services or obtain ownership interests in residential properties. Both of these fraudulent mortgage schemes may be furthered by filing bankruptcy petitions that automatically stay foreclosure.
Dawn Mertz, Assistant Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division stated that “Mortgage fraud adds to the underground economy that erodes the integrity of our tax system and threatens the financial health of our communities. IRS CI is committed to pursuing individuals who commit these types of crimes.”
Kenneth M. Donohue, Inspector General of the Department of Housing and Urban Development (HUD), stated, “Today is an important milestone in a combined effort by law enforcement and the U.S. Attorneys Office against mortgage fraud. The Real Estate Settlement Procedures Act (RESPA) was enacted to protect all parties involved in real estate transactions, to including the lenders. These cases involve individual homebuyers and real estate professionals, driven by greed, who falsified closing documents that diverted “cash” to the buyers. Mortgage fraud and white collar crimes - whether aimed at the lender or the borrower - strike at the economic heart of the American system. To the extent that we can uncover and prosecute these activities, it’s to everyone’s benefit. Accordingly, I am happy for the HUD Office of Inspector General to join the U.S. Attorney’s Office in heralding this successful effort.”
“Mortgage fraud is a serious problem in Arizona and we are committed to working with city, state and federal agencies to protect Arizona residents and lenders. I applaud the hard work of the U.S. Attorney’s office, law enforcement and our state agency investigators,” stated Felecia Rotellini, Superintendent, Arizona Department of Financial Institutions. “We will continue to cooperate in the investigations and to pursue administrative actions against our licensees to send the message that mortgage fraud will not be tolerated in Arizona.”
“This case sends an important message about maintaining high standards for the mortgage industry,” stated Alan Rodbell, Chief of the Scottsdale Police Department. “It’s clear how these types of crimes can affect all levels of the community, from the financial industry to neighborhoods and individual homeowners. We are pleased to be part of this collaborative effort.”
An indictment is not evidence of guilt. All persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt. The prosecution is being handled by Kevin Rapp, Assistant U.S. Attorney, District of Arizona, Phoenix.
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
Legal Disclaimer.
The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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