Wednesday, February 13, 2008

Task Force Formed To Counter Growth Of Mortgage Fraud In Western Pennsylvania

United States Attorney Mary Beth Buchanan and key officials from federal, state and local law enforcement and regulatory agencies announced today the launch of the Western Pennsylvania Mortgage Fraud Task Force, a strategic partnership intended to combat the growing problem of mortgage fraud in the Greater Pittsburgh region.

The Mortgage Fraud Task Force brings together representatives from the U.S. Attorney’s Office, Federal Bureau of Investigation, Internal Revenue Service - Criminal Investigation, U.S. Postal Inspection Service, U.S. Secret Service, U.S. Department of Housing and Urban Development - Office of Inspector General, Pennsylvania Attorney General’s Office, Pennsylvania Department of Banking, Pennsylvania Department of State, Bureau of Enforcement and Investigation and the Allegheny County Sheriff’s Office to investigate and prosecute mortgage fraud offenders.

“Owning a home has long been part of the American dream,” said U.S. Attorney Buchanan.  “Through the Western Pennsylvania Mortgage Fraud Task Force, we are aggressively pursuing anyone who illegally stands in the way of this dream.”

U.S. Attorney Buchanan also announced the establishment of a mortgage fraud hotline for industry members to call to report potential fraud. The number is 412-894-7550. Once potential abuses have been reported, the Task Force will work with other appropriate law enforcement and prosecutorial entities to evaluate and investigate the claims. Consumers may report suspected fraud by calling the Pennsylvania Attorney General’s Consumer Protection Hotline at 1-800-441-2555 or by downloading a complaint form from http://www.attorneygeneral.gov.

Mortgage fraud is generally described as a scheme involving the submission of false information to lenders and others in order to obtain mortgage loans that would not otherwise have been approved. Such schemes often include the submission of false information to lenders and others in order to obtain loans at higher values and lower rates than would be available through legitimate means. A typical mortgage fraud scheme employs various professionals such as recruiters, attorneys, appraisers, mortgage brokers, and builders. For example, a victim is recruited. A set of falsified loan application documents, including an inflated appraisal, is prepared and submitted to a victim lender resulting in the issuance of an over-valued loan. Ultimately the property is foreclosed upon due to the inability of the victim buyer to maintain the payments. The lender loses the difference between the foreclosure sale proceeds and the loan balance. The buyer loses any down payment and is left with a credit history that precludes being approved for a mortgage in the future. The conspirators pocket the difference between the overvalued loan and their costs in obtaining the property. Other victims include property owners in the area who see property values plummet as a result of foreclosure sales or vacant foreclosed properties.

Jim Gehr, Special Agent in Charge of the U.S. Secret Service’s Pittsburgh Field Office noted, “The U.S. Secret Service is very serious about its commitment to protect Pittsburgh and other Western Pennsylvania communities from high impact financial crimes, such as mortgage fraud.  We proudly stand side by side with our local, state and federal law enforcement partners in conducting these investigations.”

“The U. S. Postal Inspection Service is committed to protecting postal customers from misuse of the mails,” said Robin Dalgleish, Inspector in Charge, United States Postal Inspection Service, Pittsburgh Division.  “We are pleased to be participating in the Mortgage Fraud Task Force in order to protect consumers from unscrupulous mortgage brokers, appraisers and others who conspire in these crimes that cause consumers to lose their homes and even their dreams of home ownership.  We look forward to working with other task force members and anticipate the positive results from our collaborative effort to protect the public and businesses of Western Pennsylvania.”

“Mortgage fraud crimes create a loss of tax revenue, burden lenders with bad loans and neighborhoods with abandoned and deteriorating properties,” said Charles A. Jenkins, Special Agent in Charge IRS-Criminal Investigation, Pittsburgh Field Office.  “IRS stands ready to partner with all law enforcement agencies to pursue individuals who commit these types of crimes that can negatively impact our community and economy.”

Joseph Clarke, Special Agent-in-Charge, U.S. Department of HUD, Office of Inspector General, Mid-Atlantic Region added, “This Task Force will bring investigative resources together in an effort to further the Federal Government’s commitment to investigate fraud schemes developed to victimize unwitting home buyers and financial institutions that are in the business of helping individuals achieve the dream of home ownership.  Through this Task Force, the HUD Office of Inspector General will further its efforts to improve the integrity of HUD/FHA Single-Family Insurance Programs.”

Robert Rudge, Assistant Special Agent in Charge of the FBI’s Pittsburgh Office, stated, “Investigation of mortgage fraud is one of the most important criminal priorities of the FBI and a growing problem throughout the United States.  The formation of the Western Pennsylvania Mortgage Fraud Task Force is an important step in ensuring that this problem is effectively addressed in Western Pennsylvania.”

“For many people, our homes are our most valuable possessions, which makes them prime targets for scam artists seeking to take advantage of unsuspecting consumers,” Pennsylvania Attorney General Tom Corbett said. “The Attorney General’s Bureau of Consumer Protection will work vigorously to protect the rights of all of the consumers caught up in real estate and mortgage schemes.”

“A Banking Department study of mortgage lending in Pennsylvania clearly showed that lenders, brokers, servicers, appraisers, developers, contractors, builders and others are all key players in today’s complicated mortgage transactions,” said Steve Kaplan, Secretary of Banking. “While the vast majority are honorable, this task force combines the concentration, expertise and authority we need to find and prosecute those who are not.  The Banking Department is proud to be a part of this stepped-up enforcement effort even as we continue our work in Harrisburg to change Pennsylvania’s laws to better protect homebuyers.”

Secretary of the Commonwealth Pedro A. Cortés stated, “Mortgage fraud affects some of our most vulnerable families and is a practice that must be stopped.  The Department of State is eager to work with this interagency task force, which will combine all of the agencies’ collective strengths to investigate and prosecute mortgage fraud offenders.”

Allegheny County Sheriff William P. Mullen said, “Executing sales on foreclosed properties is not a pleasant or easy task, but it is an obligation the Sheriff’s Office is bound to fulfill.  The Sheriff’s Office is glad to play its role in a partnership committed to unmasking and preventing the crooked real estate deals contributing to our region’s mortgage foreclosures.  We are hopeful this initiative will bring a deliberate decline to Sheriff’s Sales and look forward to working with the U.S. Attorney’s Office and participating agencies to thwart the illicit practices of mortgage fraud.”

As part of the stepped up investigation into and prosecution of mortgage fraud cases, U.S. Attorney Buchanan announced the charges filed within the past week against 24 individuals, and pointed to other successful prosecutions occurring in 2007.  Case summaries follow.

mortgage fraud

Post a Comment Name: Email: Location: Smileys Remember my personal information Notify me of follow-up comments? Submit the word you see below: The trackback URL for this entry is: Trackbacks: Previous entry: Search posts: Advanced Search --> Enter your Email Preview | Powered by FeedBlitz

Today's News

Some Sources require Registration.   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. Defaulted Loans May Haunt Seniors On Line WSJ.Com A little-noticed law could soon result in smaller Social Security checks for hundreds of thousands of the elderly and disabled who owe the U.S. money from defaulted loans and other debts more than a decade old. Oregon to Help Homeowners Prevent Foreclosures CBS State 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. Previous Articles

TRIAL COVERAGE

Trial coverage provided by Anne Mitchell, Crazy Fish Realty. Follow Anne on Twitter. Thursday, February 18, 2010 F. Jeffrey Miller Trial - 1 Convicted, 3 Acquitted The jury deliberated for approximately 3 days after receiving their jury instructions. They asked one question: Does ‘common sense' allow us to deduce what the banks may or may not been influenced by in order to make a loan? Judge Julie Robinson responded by admonishing the jurors to read all of the instructions. The jury presented its' verdict... Read More... 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... Read More... 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... Read More... 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... Read More... 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... Read More... More Trial Coverage

What's Your Opinion?

ORDER NOW!!

Blog Roll

All Foreclosure Information and Resources Housing Storm Calculated Risk Mortgage Lender Implode-O-Meter Home Gain Blog Rain City Guide Real Estate Tomato Blood Hound Blog Appraiser Active Fraud, Phishing and Financial Misdeeds The Collar - US News and World Report Georgia Bankruptcy Blog Fighting Fraud Newsday Real LI Matrix