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Tag Archives: Fraud

States and Metros Known for Fraud Are Repeat Offenders: Report

States and metro areas known for being risky when it comes to mortgage fraud seem to be repeat offenders, according to the 2011 Annual Mortgage Fraud Risk report released by Interthinx. The top six states with the highest levels of mortgage fraud risk in 2010 maintained their spots as the riskiest states into 2011, a trend also seen when looking at data for fraud in Metropolitan Statistical Areas (MSAs). Nevada, Arizona, Florida, California, Colorado, and Michigan were the six riskiest states for 2011 and 2010.

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Former CFO of Mortgage Company Pleads Guilty to Fraud

A former chief financial officer of Taylor, Bean & Whitaker Mortgage (TBW) pleaded guilty Tuesday to making false statements and conspiring to commit bank and wire fraud for his role in a $2.9 billion scheme that contributed to the failures of TBW and Colonial Bank. Delton de Armas of Carrollton, Texas, faces a maximum penalty of 10 years in prison when he is sentenced on June 15, 2012. He admitted in court that from 2005 through August 2009, he and others schemed to defraud financial institutions that had invested in Ocala Funding.

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Arizona Woman Sentenced to 15 Years of Prison for Fraud

An Arizona woman was sentenced to 15 years in prison and ordered to pay $22 million in restitution after pleading guilty to various charges related to a mortgage fraud scheme and to charges of bankruptcy, wire, mail, and bank fraud in two separate indictments, according to a March 8 release from the U.S. attorney's office. Paige Kinney, also known as Jamie Lee Lawler, led a $40 million mortgage fraud scheme that targeted Countrywide Home loans and other lenders.

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California AG Appoints Professor as State’s Settlement Monitor

Katherine Porter, a professor at the University of California, Irvine School of Law was appointed as the California monitor to ensure compliance from the five largest servicers - Bank of America, JPMorgan, Wells Fargo, Citigroup, and Ally Financial - as stated in the $25 billion settlement, announced Attorney General Kamala D. Harris. Upon federal court approval of the settlement, Porter will verify if the lenders are meeting their obligations to California homeowners.

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After More Than a Month, $25B Settlement Filed in Court

The $25 billion mortgage servicing settlement agreement was filed in federal court Monday, according to an announcement from the Justice Department, HUD, and 49 state attorneys general. The court documents provide details of the servicers' financial obligations under the agreement, which include payments to foreclosed borrowers, more than $20 billion in consumer relief, and new servicing standards that will change foreclosure practices and policies for foreclosure prevention.

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California Law Firm Owners, Attorney Arrested for Modification Fraud

Owners and the managing attorney of a California-based law firm were arrested Thursday for loan modification fraud, California Attorney General Kamala D. Harris announced in a release. Flahive Law Corporation charged thousands of dollars in up-front modification fees for services that were never performed for homeowners, many of whom ended up losing their homes. The defendants claimed that through a mortgage violation audit, they could find bank violations in loan documents and use that as leverage to get a loan modified.

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Reported Mortgage Fraud Filings Increased in Q3

Financial institutions filed 19,934 mortgage loan fraud (MLF) suspicious activity reports (SARs) in the third quarter of 2011, a 20 percent increase compared to the third quarter last year, when 16,567 reports were filed, according to the Financial Crimes Enforcement Network (FinCEN) report of MLF SARs. In the third quarter of 2011, about 62 percent of the filings involved suspicious activities that started four or more years ago, compared to only 24 percent a year ago during the same time. The 2011 filings stem largely from mortgage repurchase demands and special filings generated by several depository institutions related to mortgages originated in the height of the housing boom, according to the report.

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Five California Men Charged Due to Alleged Modification Scheme

Five California men were charged for allegedly operating a mortgage modification scheme and defrauding hundreds of victims under the business as CSFA Home Solutions, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and Orange County, California, District Attorney Tony Rackauckas announced Friday in a statement. Between January 2009 and March 2012, the defendants are accused of creating numerous fraudulent loan modification businesses through which they purported to offer loan modification assistance.

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Brookstreet CEO Ordered to Pay $10 Million Penalty in SEC Case

Former CEO of Brookstreet Securities Corp. was ordered by a federal judge to pay a maximum $10 million for securities fraud, the Securities and Exchange Commission (SEC) announced Friday in a statement. The SEC charged Stanley C. Brooks and Brookstreet in December 2009 with fraud due to the sale of risky mortgage-backed securities to customers who were not looking to purchase risky investments. The more than thousand customers who bought the risky Collateralized Mortgage Obligations (CMOs) through Brookstreet included seniors and retirees.

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FBI Reports High Number of Mortgage Fraud Cases in Recent Years

While mortgage originations are at their lowest level since 2001, investigations for mortgage fraud have shot up in recent years. As of December 31, 2011, the FBI reported 2,590 pending mortgage fraud investigations with 71 percent involving losses of more than $1 million. With increased levels of foreclosures and delinquencies over the past few years, schemes targeting distressed homeowners as victims have surged. Through FY 2011, FBI investigations resulted in 1,082 convictions of mortgage fraud criminals.

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