Thursday, January 31, 2008
FBI Comments on Mortgage Fraud and Other Real Estate Schemes
Imagine landing your dream home.Your credit is a bit shaky, but you manage to get a subprime loan with an adjustable rate mortgage. A few years later the interest rates jump and you can no longer afford to pay. You see an ad for a business that’s willing to help—it’ll pay your mortgage for a modest monthly fee while you get back on your feet. But here’s the heartbreak: it’s a scam. The con artists just take your money and run…
It’s just one of the latest schemes and frauds we’re [teh FBI] seeing these days across the financial services industry, our senior criminal investigators said during a briefing Tuesday with the news media in Washington.
These scams—which include plenty of shenanigans with mortgages and subprime loans—are costing the nation tens of billions of dollars a year.
“Greed is definitely not good for our economy right now,” said FBI’s top criminal investigative exec Ken Kaiser following the briefing. “It’s hurting homeowners. It’s hurting honest businesses. And it’s hurting investors and markets around the world.”
All good reasons why we are squarely focused on cracking down on the largest of these financial crimes, launching proactive initiatives and shifting resources as trends emerge, all the while working hand-in-hand with a host of government and private sector partners.
Among the specifics discussed at the briefing:
Subprime mortgage loans:
We’re investigating 14 corporations involved in subprime lending as part of our Subprime Mortgage Industry Fraud Initiative launched last year.
The companies come from across the financial services industry, from mortgage lenders to investment banks that bundle loans into securities sold to investors. We’re also looking at insider trading by some executives.
Traditional mortgage fraud:
We have more than 1,200 cases open today (up about 40 percent from last year), mostly involving fraud for profit, where groups of straw buyers, realtors, etc. rig schemes to buy properties that are flipped or allowed to go into foreclosure.
Hotspots include California, Texas, Arizona, Florida, Ohio, Michigan, and Utah.
Suspicious activity reports that we review for potential mortgage fraud have grown from 3,000 in fiscal year 2003 to 48,000 in fiscal year 2007. This year, we’re on pace to receive more than 60,000 such reports.
A recent case: In November, the owners of a long-time Minnesota homebuilder called Parish Marketing—along with a bank officer, a closing agent, and others—pled guilty to a $100 million mortgage scheme involving some 200 homes.
Right now, we’re seeing no links to organized crime syndicates, street gangs, or terrorist groups in our cases.
For more information on financial frauds:
- Financial Crimes Report to the Public, Fiscal Year 2006
- Mortgage Fraud overview
mortgage fraud
Its so unfortunate to see how people who are in the worst of financial circumstances get dragged down even further with these mortgage scams. There should be heavy punishment for the culprits.
Posted by on 02/12 at 05:46 AM
I think in the US the laws and reulations need to be tightened up a lot.
Posted by on 02/18 at 11:40 PM
Unfortunately, scams abound in the real estate and mortgage world. The best advice I give is pretty simple. “If it sounds to good to be true, it usually is”. Good motto to live by.
Posted by on 05/24 at 05:09 AM
very insightful, excellent information.
Posted by on 06/11 at 04:59 AM
hurray for the fbi
Posted by on 06/27 at 10:59 AM
This has nothing to do with outside business, this has to do with our own government being trapped in a cycle of perpetual debt.
The FBI would do well to take a look at itself first and foremost…
Posted by on 10/14 at 07:05 PM
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Some Sources require Registration.
Mortgage Fraud: Beware the Wolf (Loan Officer) in Sheep's Clothing
24-7PressRelease.com - USA
US consumers looking to refinance their homes or to secure a home loan to purchase their dream homes would be well advised to educate themselves...
Internet Scammer Sells Cape Coral Residential Lot For $18,000
The News-Press - Fort Myers, FL
Because she had title insurance, Kunda will probably get back her money from the 2007 purchase, but the incident highlights cracks in the real estate market and the risk from international scammers who are growing more sophisticated.
Prosecutors Busy With Fraud Cases
Daytona Beach News-Journal - Daytona Beach, FL
The U.S. Justice Department has formed more than 40 mortgage fraud task forces nationwide as prosecutors and investigators struggle with a flood of mortgage-related criminal cases. The FBI reports that its mortgage-fraud caseload has more than doubled in three years to about 1,600 investigations that have cost lenders at least $4 billion. About 200 FBI agents are assigned to the cases, up from 120 a year ago.
Yanchek may take plea deal
Herald Tribune
Sarasota attorney John Yanchek is expected to plead guilty to mortgage fraud next week, statements from a federal prosecutor and the judge presiding over the high-profile criminal case seem to indicate.
Bear Stearns Execs Trial Slated for September
News Inferno
Two former Bear Stearns hedge fund executives are slated to go to trial in September over charges that they lied to investors about two of the funds they managed
Rockford, Chicago lead state in mortgage fraud
Rockford Register Star
Reported incidents of mortgage fraud grew by 45 percent in the second quarter compared with the year-ago period.
Report Finds Tampa No. 2 In Florida For Iffy Mortgages
Tampa Bay Online
In a state that leads the nation in mortgage fraud, Tampa had the second most cases of suspicious loan activity of any Florida city, according to a report released this morning from the Reston, Va.-based Mortgage Asset Research Institute.
Mortgage Fraud Jumps by 45% on Fewer Loan Applications in U.S., Per... MARI
Cloud Computing Journal
Key findings from the MARI Quarterly Fraud Report include that fraud most often occurs at the beginning of the loan process. More than 65 percent of fraud incidents are attributed to "General Application Misrepresentation"
Seven Are Accused Of Identity Theft And Mortage Fraud
The Star Ledger, New Jersey
Seven people have been arrested in connection with an international identity-theft scheme that targeted home equity lines of credit and siphoned at least $2.5 million away from dozens of banks, including more than 10 in New Jersey, according to documents unsealed today.
Suthers Cracks Down On Mortgage Fraud
Rocky Mountain News - Denver, CO
Suther’s office also indicted 10 individuals last March in an $11 million mortgage fraud ring involving 34 local properties...Several other investigations of mortgage fraud are ongoing.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
U.S. v. Miller, et al.
Thursday, December, 18, 2008
Verdict:
F. Jeffrey Miller Guilty of Conspiracy and Money Laundering
Steven Vanatta Guilty of Conspiracy , Money Laundering and Bank Fraud
Hallie Irvin Guilty of Conspiracy , Money Laundering and Bank Fraud
Sandra Jo Harris Not guilty- all counts
More Trial Coverage
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Rachel Dollar is an attorney and Certified Mortgage Banker who handles fraud recovery litigation for lenders and secondary market investors nationwide. She is a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is licensed to practice law in California and maintains offices in Santa Rosa, California. 
