More than 500 people have been charged in a government crackdown on mortgage fraud, with defendants facing a range of allegations, following investigations by the U.S. Financial Fraud Enforcement Task Force.
Our Miami foreclosure attorneys understand that nearly 75,000 desperate homeowners were targeted in a range of scams and schemes that resulted in more than $1 billion in losses.
These were individuals and companies who portrayed themselves as rescuers to homeowners who were deeply in debt on underwater homes, the values of which tumbled amid the housing bubble burst.
U.S. Attorney General Eric Holder, addressing the nation in a press conference with administrators from the Federal Trade Commission, the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development. The goal was to come down hard on mortgage fraud and similar offenses being perpetuated throughout the country.
Following this announcement, government officials also announced a civil lawsuit filed against banking giant Wells Fargo in a mortgage loan fraud scheme that it perpetuated for more than 10 years in working with the Federal Housing Authority program. At issue were the way mortgages were packed and sold to investors leading up to the economic crisis. It’s expected that similar cases may follow.
With regard to the 530 individuals arrested in various scams, the FBI’s associated director alleged that ordinary homeowners were the target. They were desperate for help, trying to save their homes, their credit and their future.
Apparently, the most common form of fraud is displaced loan-origination fraud. There are several types of this, including:
- Bogus foreclosure rescue offers;
- Illegal property flipping or “straw buyers”;
- Loan modification scams.
The first, bogus foreclosure rescue offers, involves con artist who purchase lists of homeowners currently facing foreclosure due to falling behind on mortgage payments. The homeowners are then approached with an offer to save their home, but they unwittingly sign away home ownership to the individual they believe is trying to help them.
The second, illegal property flipping, involves when a home is purchased and then resold within a short period of time at a value that is artificially inflated. Usually, this requires the appraiser to be in on it, and the appraisal will include false or inflated claims of renovations or improvements.
The third, loan modification scams, involve a variety of tactics. One of those is when a scam artists poses as a counselor and promises to negotiate a deal with your lender to save your home by obtaining a loan modification. He or she charges an upfront fee, tells you not to have contact with your lender and then takes off with the money without ever doing a thing. Some even claim to be with the government.
These are egregious violations in that they targeted the people when they were at their most vulnerable. This was not an issue of homeowners failing to do their due diligence. These people were preyed upon, and those who perpetuated these actions deserve to pay for them.
If you believe you may have been a victim of a mortgage scam, call us today to see how we can help.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
Hundreds charged in $1B homeowner fraud schemes, Oct. 9, 2012, By Pete Yost, Associated Press
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Should Banks Be Left to Their Own Devices? Oct. 6, 2012, Miami Foreclosure Lawyer Blog