Tag Archives: Fraud

California Attorney General Kamala D. Harris outlined the six parts in the proposed California Homeowner Bill of Rights during a press conference on Wednesday. The first part of the bill the California AG announced was the Foreclosure Reduction Act, which will address dual tracking issues. Other requirements in the bill include a $25 levy each time servicers record a notice of default, fines against owners of blighted property from $1,000 to $5,000 per day, and a $10,000 civil penalty for ""robosigned"" documents.

The risk for property valuation fraud rose nearly 8 percent for this fourth quarter, according to the Mortgage Fraud Risk Report released by Interthinkx. This rise caused certain regions of the New York Tri-State region to move into the high risk category. The national mortgage fraud risk index also increased by 1.4 percent compared to the last quarter and 3.6 percent since a year ago. With an index value of 247, Arizona overtook Nevada as the riskiest state. Nevada, now at number two, ranked first in this category since the first quarter of 2010.

CitiMortgage, a subsidiary of CitiBank, agreed to pay $158.3 million due to claims that the bank failed to comply with HUD and FHA requirements in underwriting loans for federal insurance, and for stating certain loans were eligible for FHA's mortgage insurance program when they were not. As a result of these actions, HUD incurred losses from defaulted loans that should not have been approved. CitiMortgage accepted responsibility for specific actions including failing to conduct a full review of certain loans it endorsed.

With all the buzz after the multistate settlement regarding potential relief to homeowners, the Texas Foreclosure Prevention Task Force reminded consumers to be cautious of potential scams. It's getting harder to identify the good guys from the bad guys, said David Long, co-chair of the TFPTF. Borrowers will not know immediately if they are eligible for relief, and there is no cost to participate in the initiatives from the settlement.

The Financial Crimes Enforcement Network (FinCEN) is expanding its reach. The agency, which in the past has required banks to establish anti-money laundering programs and notify FinCEN of suspected fraud through suspicious activity reports (SARs), will now require non-bank residential mortgage originators and lenders to do the same. FinCEN has noticed recently that many SARs it has received from banks reported suspicious activity on loans originated by independent lenders.

A New York housing counselor has been sentenced to 72 months in jail and three years supervision by a U.S. District Court judge after defrauding 136 homeowners who reached out for help as they attempted to avoid foreclosure. The judge also ordered Lori J. Macakanja to pay $298,639 in restitution to the homeowners affected. Macakanja reportedly required upfront fees from homeowners and promised in return to help them achieve mortgage modifications in order to stave off foreclosure.

The special mortgage investigation unit announced by President Obama during his State of the Union address Tuesday night has taken shape. The new Residential Mortgage-Backed Securities (RMBS) Working Group will operate within the Financial Fraud Enforcement Task Force and will consists of at least 55 Department of Justice attorneys and investigators, as well as state attorneys general. The president has tasked the group with uncovering those responsible for pooling and selling mortgage bonds that contributed to the financial crisis.

New York Attorney General Eric Schneiderman has reportedly been designated co-chair of President Obama's new investigative team to probe the mortgage industry for past misconduct. In his State of the Union address, Obama announced the creation of a special unit of federal prosecutors and state attorneys general to examine the risky lending practices that led to the financial crisis. As the industry and the economy stagger toward recovery, some believe digging into the past may not be the best way to move forward.

Oregon Attorney General John Kroger has issued a public warning to consumers in the state to be on the lookout for scammers portending to offer independent foreclosure reviews as part of the mandate to major mortgage servicers issued by the OCC and Federal Reserve. Servicers have begun offering case reviews to consumers who faced foreclosure between January 1, 2009 and December 31, 2010. Kroger says scam artists are also contacting Oregon consumers, offering to conduct an ""independent foreclosure home loan review"" or a ""securitization review"" for a fee.

Michigan is taking a strong stand on mortgage fraud. New state laws that went into effect at the start of the year have redefined mortgage fraud in the eyes of the law and outline strict consequences for perpetrators. Residential mortgage fraud is now considered a felony in Michigan, and punishment includes up to 20 years in prison and fines up to $500,000. The new laws define mortgage fraud itself as a criminal act, whereas previously, mortgage fraud fell into the categories of false pretenses and forgery.