Tag Archives: Fraud

Two New York attorneys were convicted of 10 felony counts for their roles in a $25 million mortgage fraud scheme, the U.S. Attorney's Office for the Eastern District of New York announced in a statement Monday. Matthew Burstein, 40, and Aaron Rabinowitz, 40, of the law firm Burstein & Rabinowitz were allegedly involved in a scheme that resulted in over $25 million in fraudulently-obtained loans from Countrywide Financial, Fremont Investment and Loan, IndyMac Bank, Sun Trust Mortgage, Inc., Wells Fargo & Company, and New Century Mortgage Corporation. The defendants could face up to 30 years in prison.

The Aloha State recently passed three new bills related to mortgage servicing and mortgage origination. All three went into effect at the beginning of this month.

Amherst Securities Group expressed in a Mortgage Insight release worries about loopholes in eligibility requirements under the expanded HAMP program. The release specifically points to a rule that requires investors to pledge that they actually intend to rent the home; the requirement has no provisions about reporting on the investor's actual efforts to rent or on the income collected.

United States Attorney for the District of New Jersey Paul J. Fishman announced Thursday that 11 people are charged for their alleged roles in a mortgage fraud scheme, including one defendant who attempted to murder a witness. The 11 individuals include seven from New Jersey and others from Pennsylvania, Massachusetts, Georgia, and Alabama. According to a report on NJ.com, the New Jersey defendants include Seth Fuscellaro, a public defender in Lower Township. The defendants are charged for their roles in a $15 million mortgage fraud scam that used phony documents and straw buyers to make illegal profits on overvalued condos.

The SEC announced Wednesday that the U.S. investment banking subsidiary of Mizuho Financial Group agreed to pay $127.5 million to settle charges of misleading investors. The accused are charged with using dummy assets to inflate credit ratings in order to execute a collateralized debt obligation (CDO) deal. The SEC also charged the firm that served as the deal's collateral manager and the portfolio manager.

Lake Research Partners released the results of an opinion poll showing that financial reforms enacted in recent years remain popular with potential voters. In light of events leading to 2008's financial meltdown, potential voters seem to overwhelmingly favor financial reform laws designed to prevent abuse. Nearly three-quarters (73 percent) of respondents favor the Dodd-Frank financial reforms, while only 20 percent expressed disagreement.

Top executives and favored borrowers faced indictment by a federal grand jury on Wednesday for their role in a massive fraud that led to the biggest Virginia bank collapse since 2008. According to a release on Thursday from SIGTARP, the accused are charged with masking non-performing assets at the Bank of the Commonwealth in Norfolk, Virginia.

Scam Detector Inc., developer of a fraud prevention app that shares the company's name, announced Thursday the launch of its app for the Android platform.

Mortgage origination fraud may be on the decline, but incidences of collusion appear to be trending up, according to a report released Wednesday by LexisNexis Risk Solutions. After noticing a rising trend in collusion, LexisNexis created a new index specifically to measure incidences of collusion. Collusion has been on the rise since 2009, according to Tim Coyle, senior director of real estate and mortgage solutions at LexisNexis. He noted during a conference call that prior to 2009, collusion reports remained just below 5 percent. By 2010, the rate had almost doubled.

The Homeowner Bill of Rights so far consists of a series of related bills containing provisions that prohibit certain practices by lenders that have been attributed to the state's foreclosure crisis. Chief among the banned practices are robo-signing (signing of fraudulent mortgage documents without review) and dual-track foreclosure (starting foreclosure proceedings while the homeowner is in negotiations to save the home). The bill imposes civil penalties on perpetrators of these activities. In addition, it guarantees struggling homeowners a single point of contact at their lender who has knowledge of their loan and direct access to decision makers.