Tuesday, November 06, 2007
Fighting Mortgage Related Scams
The home mortgage crisis is one of the great problems looming on the horizon for Americans. A combination of forces – including fraud, subprime lenders with lighter credit standards, decreases in the market value of homes, and interest rate increases – have led to a dire situation. With many Texans facing foreclosure and at risk of losing their homes, the Office of the Attorney General (OAG) is working with major lenders to protect homeowners.
Home ownership lies at the heart of the American dream, so foreclosures can be devastating for homeowners, their families, and ultimately for the community. Equally troublesome, foreclosures are already negatively impacting the economy, affecting interest rates, decreasing property values and harming financial markets.
The OAG is doing all they can to help Texans keep their homes. Earlier this year, the OAG concluded its investigation into Ameriquest, a subprime lender that deceived homeowners into refinancing their homes at unfavorable mortgage rates. Under a settlement negotiated by the OAG, Texas homeowners received more than $21 million in restitution from the lending giant.
The OAG is also cracking down on scam artists who are trying to exploit fearful homeowners to take advantage of this tough situation. Many fraudulent “foreclosure rescue” services collect exorbitant fees from at-risk homeowners, promising to prevent foreclosure. The scammers just worsen the situation, often accelerating the foreclosure process by advising homeowners not to speak directly to their lenders to resolve their problems.
Homeowners are not the only ones harmed by mortgage-related scams. A growing number of scam artists are duping lenders, mortgage companies and other businesses in the mortgage industry. Mortgage fraud involves intentionally or knowingly making a false or misleading written statement to obtain property or credit, including a mortgage loan. This type of fraud can take many forms, but the most common schemes include fraudulent appraisals, inflated income on loan applications, and even identity theft.
According to the FBI, mortgage fraud is one of the fastest-growing white collar crimes in the United States. Mortgage fraud is also a real problem in Texas. A 2006 report by the federal Financial Crimes Enforcement Network ranked Texas fourth in the nation for real estate mortgage loan fraud.
Fraud may be committed by a sole borrower seeking a personal loan, or it could be committed by a criminal seeking to obtain and purchase loans as part of a larger scheme, such as money laundering. Mortgage fraud may also include unlawful kickbacks to buyers, investors, property or loan brokers, appraisers, and title company employees.
Recognizing the pervasive mortgage fraud problem, the Texas Legislature took action to increase cooperation among law enforcement agencies by creating the Texas Mortgage Fraud Task Force.
Task force members, including the attorney general and top state real estate, banking and consumer credit regulators, held their first meeting in September. Future task force meetings will improve interagency communications and further law enforcement’s efforts to track and reduce mortgage fraud in Texas. The new legislation also authorized the attorney general to prosecute criminal mortgage fraud cases in coordination with local prosecuting attorneys.
The OAG is committed to protecting Texas homeowners. Public officials must continue working with lenders, educating homeowners and prosecuting scam artists as we strive toward a solution to this troubling situation. The dream of home ownership is too important to ignore.
POINTS TO REMEMBER: MORTGAGE FRAUD
NEVER falsify information on a mortgage loan application, including:
• Borrower’s identity
• Income
• Asset figures
• Credit history
NEVER provide inflated appraisal information to a lender or hide a second mortgage.
NEVER enter into a “foreclosure rescue” contract with a third party without carefully reviewing the terms.
Texas Residential Mortgage Fraud Task Force members
• Attorney General
• Consumer Credit Commissioner
• Banking Commissioner
• Credit Union Commissioner
• Commissioner of Insurance
• Savings and Mortgage Lending Commissioner • Texas Real Estate Commission • Texas Appraiser Licensing and Certification Board • Reporting Mortgage Fraud
To report mortgage fraud by a lender or borrower, contact your local district attorney or the Office of the Attorney General at (800) 252-8011.
For more home buying tips, including avoiding foreclosure scams and other common pitfalls, visit the Attorney General’s Web site at http://www.oag.state.tx.us.
mortgage fraud
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Some Sources require Registration.
Mortgage Fraud Risk Index Jumps 11 Percent, According to Verisk Analytics Subsidiary Interthinx
CNNMoney.com
The report...indicates that the overall Interthinx Mortgage Fraud Risk Index surged more than 11 percent from the previous quarter...
Mortgage Fraud Case Appears Headed to Jury in Jackson County Circuit Court
The Jackson Citizen Patriot - MLive.com
The prosecution and defense rested Thursday in the mortgage fraud cases against Teresa Marie WIlson and Angelo Surveo Williams.
Wyoming Woman Charged with Mortgage Fraud After Allegedly Stealing Sister's Identity
MLive.com
A Wyoming woman is facing felony charges accusing her of stealing her sister's identity to obtain a mortgage...then defaulting on that mortgage, leaving taxpayers on the hook.
U.S. Attorney Targets White-Collar Crime
Wall Street Journal
In San Francisco, Mr. Russoniello said he is trying to crack down on cases like mortgage fraud, though he doesn't have the budget to hire additional white-collar prosecutors.
Arrests Made in Orlando Mortgage Fraud Roundup
MyFoxOrlando.com
During the real estate boom two years ago, some units were going for a half million dollars. Now some are short selling for just 50 grand.
10 Accused of Mortgage Fraud at PR Coastal Resort
Forbes
A developer and nine other people, including a former salsa singer, have been charged in an alleged $14 million mortgage fraud in Puerto Rico...
Strodtman Jury Selected in Mortgage Fraud Trial
Greeley Tribune
Attorneys will deliver opening statements this morning in the trial of Mark Strodtman, who is accused of bilking homeowners in a mortgage scheme years ago.
FHA Digging Out After Loans Sour
Wall Street Journal
Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration...
Mortgage Fraud Probe Nets 105 Across State
Bradenton Herald
At least one local man is among 105 people arrested across the state following a nine-month investigation into organized mortgage fraud.
Mortgage Fraud Increases
MortgageRates.co.nz
The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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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 
