Tag Archives: Fraud

Woodward Asset Capital has announced plans to launch a new short sale technology application in April that the company says will prevent short sale fraud while reducing transaction times and netting lenders the highest possible sale price. Woodward explained that its new software, VerifiedShortSale, puts the mortgage servicer in control be being first to review every offer while ensuring a transparent process. It's modeled after the company's REO application, OfferSubmission.

Minnesota Attorney General Lori Swanson filed a lawsuit Monday against Meredian Financial Corporation, a California-based mortgage lender and broker. According to a statement from the attorney general, the lender charged Minnesota homeowners thousands of dollars in fees to refinance their mortgages, but the refinances did not happen. Swanson says Meredian targeted homeowners struggling in the troubled economy who were looking to get out of an adjustable-rate mortgage or lower their interest rate by refinancing.

As part of its crackdown on mortgage scams targeting homeowners facing foreclosure, the Federal Trade Commission (FTC) has charged a national operation with marketing bogus loan modification services. The complaint alleges that U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, and their principals mislead consumers to believe they are affiliated with or approved by consumers' lenders. They tell consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments will demonstrate the consumers' hardship and need for a mortgage modification.

An Internet hacker group, going by the name Anonymous, claims to have proof that Bank of America committed mortgage fraud by ""knowingly hiding foreclosure info from federal auditors."" The group has obtained a slew of inter-departmental emails from a former employee of Balboa Insurance, a BofA subsidiary that the company sold last month. The whistleblower says he was instructed to remove document tracking numbers so supporting paperwork could not be matched to the corresponding loans. The bank called the ""extravagant assertions"" untrue.

The California State Department of Real Estate (DRE) focused its attention on upfront fees this week as it continued to warn consumers of persons illegally offering loan modification and mortgage relief services. Since 2008, the DRE has pursued more than 4,500 cases that involved loan modification complaints, resulting in 244 ""desist and refrain"" orders to stop illegal operations that name 785 separate respondents. The agency has also made more than 100 referrals to the California State Bar identifying attorneys involved in unlawful loan modification activities.

As the housing market struggles to get back on its feet, one element holding it back is the prevalence of fraud that increases in times of trouble. In December the CoreLogic Fraud Index revealed fraud losses for 2010 were estimated to be $11 billion. In the past week, the FBI has reported several convictions for mortgage fraud schemes all over the country. The agency says scams involving false promises and fraudulent sales pitches will continue to be a major focus.

The Homeownership Preservation Foundation (HPF) is the sole recipient of a $1 million Mortgage Modification and Mortgage Scam Assistance (MMSA) grant from HUD. The grant will enable HPF to continue as the primary ""call to action"" for HUD's anti-scam campaign to assist victims as well as educate and warn distressed homeowners about foreclosure prevention and loan modification scammers.

The Securities and Exchange Commission (SEC) has charged three former executives at IndyMac Bancorp with securities fraud for misleading investors about the lender's failing financial condition. The executives, former CEO Michael Perry and former CFOs A. Scott Keys and S. Blair Abernathy, allegedly filed false and misleading disclosures about the financial stability of IndyMac and IndyMac Bank F.S.B. and continued to sell millions of dollars in new stock. Abernathy is the only one of the three who has reached a settlement with the SEC.

There has been no shortage of reports of state attorneys general seeking accountability from servicers that they allege mishandled foreclosures. Now it's being reported that attorneys general in all 50 states are near to reaching settlements with the nation's top five mortgage servicers, including Bank of America and GMAC Mortgage. The states are looking to develop separate agreements, rather than one encompassing settlement; and they plan to pursue a civil investigation rather than a criminal one.

The Obama Administration announced on Thursday a round of grants totaling nearly $73 million to more than 500 national, regional, and local organizations to provide housing counseling services. Agencies receiving the grants will focus on helping homebuyers and homeowners understand their financing and down payment options, and will help combat predatory lending by assisting borrowers with reviews of loan documentation. The new round of grants represent a 22 percent increase over last year's funding.