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
Mortgage Fraud Blog is co-sponsored by Interthinx the leading provider of fraud services and solutions for the mortgage industry.
The FBI and Department of Justice formulated Operation Malicious Mortgage (OMM) in response to the rapidly escalating mortgage fraud crime problem. This initiative was a multi-agency, coordinated national mortgage fraud effort. From March 1, to June 18, 2008, Operation Malicious Mortgage resulted in 144 mortgage fraud cases in which 406 defendants were charged, convicted or sentenced On June 18, 2008, sixty (60) arrests, nationally, were conducted. The FBI estimates that approximately $1 Billion in losses were inflicted by the mortgage fraud schemes employed in these cases.
On June 18, 2008, as part of the Operation Malicious Mortgage initiative, the Dallas FBI executed arrest warrants on eight (8) of eleven (11) individuals sought in a mortgage fraud scheme. As reported yesterday, these individuals were Eric Rulack Farrington, Jr., Regis Lamont Williams, Kevin Ray Sanderson, Tony Earl Anderson, James Edward Jones, Edwin Terrence Bell, Robert John Mason and Christopher N. Williams. Today, a ninth individual, Michael Lewis Andrews, surrendered himself to federal authorities.
Data collected from the FBI, other law enforcement, and industry sources were compared to determine which states were most affected by mortgage fraud in 2007. The top 10 mortgage fraud states for 2007 were identified as follows: Florida, Georgia, Michigan, California, Illinois, Ohio, Texas, New York, Colorado and Minnesota.
Forty One (41) Mortgage Fraud Task Forces or Working Groups addressing Mortgage Fraud have been created. The North Texas Mortgage Fraud Working Group is one of the forty one (41).
The following agencies participate in the North Texas Mortgage Fraud Working Group:
- FBI Dallas
- Internal Revenue Service (IRS)
- Housing and Urban Development, OIG (HUD-OIG)
- U.S. Secret Service (USSS)
- U.S. Postal Inspection Service (USPIS)
- Federal Deposit Insurance Corporation (FDIC)
- Bureau of Immigration and Customs Enforcement (BICE)
- Texas Attorney General’s Office
- Dallas County District Attorney
- Tarrant County District Attorney
- Collin County District Attorney
- Rockwall County District Attorney
- Denton County District Attorney
- Kaufman County District Attorney
- Ellis County District Attorney
- Texas Department of Insurance
- Texas Appraisal and Licensing Board
- Texas Real Estate Commission
Each mortgage fraud scheme contains some type of material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan. The most common form of mortgage fraud involves illegal property flipping which entails false appraisals and other fraudulent loan documents. Many mortgage fraud schemes are based upon or incorporate some form of illegal property flipping. Emerging and re-emerging schemes in 2007 included builder-bailouts, seller assistance, short sales, foreclosure rescue and identity thefts exploiting home equity lines of credit.
What should homeowners do to avoid these schemes?
- Get referrals for real estate and mortgage professionals. Check the license of the industry professional with state, county or city regulatory agencies.
- If it sounds too good to be true, it probably is. An outrageous promise of extraordinary profit in a short period of time signals a problem.
- Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques.
- Look for written information to include recent comparable sales in the area, and other documents such as tax assessments to verify the value of the property.
- Understand what you are signing and agreeing to. If you do not understand, re-read the documents, or seek assistance from an attorney.
- Make sure the name on your application matches the name on your identification.
- Review the title history to determine if the property has been sold multiple times within a short period. It could mean that this property has been “flipped” and the value falsely inflated.
- Know and understand the terms of your mortgage. Check your information against information in the loan documents to ensure they are accurate and complete.
- Never sign any loan document that contains blanks. This leaves you vulnerable to fraud.
Robert E. Casey Jr., Special Agent In Charge, Dallas, FBI, provided the above information for background purposes.
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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