November 1, 2009
Loan Modification Scams
There seems to be an abundant numbers of these scams in Southern California and there's also a new education campaign to warn homeowners.
How do most of these scams work? They charge people thousands of dollars for credit mediation and credit counseling, services provided free by the federal government.
Filed under California, Fraud by Luke Ford
October 30, 2009
Homebuyer Tax Credit Wide Open To Fraud
Gee, that's a surprise. Another government program open to fraud?
Who would've thought it?
Many of the claimants for the tax credit are thought to be illegal aliens.
Many seeking the tax credit are under the age of 18.
Filed under Fraud by Luke Ford
September 13, 2009
Three Los Angeles Mortgage Brokers Arrested
The brokers are accused of stealing about $1 million from borrowers seeking to adjust their mortgages.
California's attorney general claims this is a case of grand theft.
Dozens of home owners were apparently lured into refinancing with promises of low interest rates. The brokers snagged some nice fees and Bob's your uncle.
April 21, 2009
Government Largesse Wide Open To Fraud
Big surprise here.
When you don't have the free market to discipline the spending of money, much of it gets wasted.
A leading government investigator warns that the current bank bailout is wide open to fraud.
Filed under Fraud by Luke Ford
April 19, 2009
New York Slow To Prosecute Mortgage Fraud
Foreclosures are skyrocketing in New York but few prosecutors are bringing cases for mortgage fraud, the New York Times reports.
"As early as 2000, the federal Department of Housing and Urban Development declared the city a foreclosure fraud “hot zone.” In 2005, the National Consumer Law Center wrote an influential report, “Dreams Foreclosed: The Rampant Theft of Americans’ Homes Through Equity-Stripping Foreclosure ‘Rescue’ Scams,” warning that the F.B.I. and local prosecutors remained dangerously understaffed in this fight."
Filed under Fraud by Luke Ford
November 4, 2008
Three Arrests In An Alleged Foreclosure Scam
Expect a lot more arrests in these types of scams.
Cracking down on predatory lenders is all the rage with law enforcement, politicians and the general public.
No response yet from those arrested.
Filed under Fraud by Luke Ford
October 19, 2008
FBI Struggles With Mortgage Fraud Cases
WASHINGTON — The Federal Bureau of Investigation is struggling to find enough agents and resources to investigate criminal wrongdoing tied to the country’s economic crisis, according to current and former bureau officials.
The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. The F.B.I. is planning to double the number of agents working financial crimes by reassigning several hundred agents amid a mood of national alarm. So depleted are the ranks of the F.B.I.’s white-collar investigators that executives in the private sector say they have had difficulty attracting the bureau’s attention in cases involving possible frauds of millions of dollars.
Since 2004, F.B.I. officials have warned that mortgage fraud posed a looming threat, and the bureau has repeatedly asked the Bush administration for more money to replenish the ranks of agents handling nonterrorism investigations, according to records and interviews. According to previously undisclosed internal F.B.I. data, the cutbacks have been particularly severe in staffing for investigations into white-collar crimes like mortgage fraud, with a loss of 625 agents, or 36 percent of its 2001 levels.
Over all, the number of criminal cases that the F.B.I. has brought to federal prosecutors — including a wide range of crimes like drug trafficking and violent crime — dropped 26 percent in the last seven years, going from 11,029 cases to 8,187, Justice Department data showed.
Prosecutions of frauds against financial institutions dropped 48 percent from 2000 to 2007, insurance fraud cases plummeted 75 percent, and securities fraud cases dropped 17 percent.
Interviews and internal records show that F.B.I. officials realized the growing danger posed by financial fraud in the housing market beginning in 2003 and 2004 but were rebuffed by the Justice Department and the budget office in their efforts to acquire more resources.
“The administration’s top priority since the 9/11 attacks has been counterterrorism,” Peter Carr, a Justice Department spokesman, said. From 2001 to 2007, the F.B.I. sought an increase of more than 1,100 agents for criminal investigations apart from national security. That number has grown to 177 agents, who have opened 1,522 cases. In white-collar crime, they said the bureau has given up only lower-level cases of marginal significance that might have never been prosecuted anyway. After the collapse of Enron in 2002, the Justice Department moved aggressively against corporate fraud — too aggressively, in the view of some people within the administration. Justice Department officials said political pressures had never influenced the way prosecutors approached corporate cases. The attorney general likened the problem to “white-collar street-crime” that could best be handled by individual United States attorneys’ offices.
Paul J. McNulty, who served as deputy attorney general under Alberto R. Gonzales, said the complexity of white-collar investigations and the shortage of investigators had driven a decline in high-profile cases.
“Those cases played themselves out and it became tougher to find those big cases.”
Filed under Fraud by Luke Ford
October 6, 2008
Subprime Brokers Charged
TEL AVIV (MarketWatch) – The Securities and Exchange Commission charged that five Los Angeles-area brokers "put their customers at risk by refinancing their homes with subprime mortgages that they could not afford."
The agency, in a statement on Friday, said it charged the five with securities fraud, saying that the brokers executed the refinancings to "fraudulently sell [the homeowners] unsuitable securities." It filed the case in U.S. District Court in Los Angeles.
The five – who were both mortgage brokers and registered representatives – worked for World Group Securities Inc., the SEC said. They "paid themselves high commissions on both the subprime mortgages and the securities purchases," the agency said.
U.S. Taxpayers are on the hook for $700 Billion to purchase Toxic mortgage loans and foreclosed homes from financial institutions.
U.S. Taxpayers need to ensure this Taxpayer Bailout is not used by Congress as a public-pacifier for the government not to prosecute big corporation executives and others determined by the FBI to have “knowingly” made profits from fraudulent home loans and mortgage-backed securities.
Filed under Fraud by Luke Ford
October 2, 2008
States Crack Down On Refinance Scams
Tennessee has double the national average in personal bankruptcies. Nashville and surrounding counties accounted for almost 20 percent of the state's foreclosure filings in August.
Other schemes involve repeated bankruptcy filings to delay foreclosure. This damages the homeowner's credit without saving the home.
Take advantage of certified foreclosure-prevention counselors offered free by the Tennessee Housing Development Agency (www.THDA.org). If you have already become involved with a questionable "rescue" operation, contact the state Division of Consumer Affairs at www.tennessee.gov/consumer, or phone 615-741-4737 (toll-free in Tennessee, 1-800-342-8385).
For those homeowners who believe they were taken advantage of in the original home-finance transaction, a recently enacted law strengthens the state's oversight of the mortgage industry. This office will continue to work closely with Consumer Affairs and the Department of Financial Institutions to help victims of fraud or misconduct in mortgage lending, and will vigorously pursue "foreclosure rescue" scams that prey on our less fortunate neighbors.
Filed under Fraud by Luke Ford