Tag Archives: Fraud

The Securities and Exchange Commission (SEC) on Thursday charged RBS Securities Inc., the wholesale banking subsidiary of the Royal Bank of Scotland, with misleading investors in a 2007 subprime residential mortgage-backed security (RMBS) offering. RBS agreed to settle the matter and pay more than $150 million, which the SEC will use to compensate investors for harm suffered as a result of the RBS deal.

While Florida, Nevada, and California are some of the most commonly cited examples of states hit hard by the housing implosion, an analysis of fraud data submitted to LexisNexis' Mortgage Industry Data Exchange (MIDEX) shows New Jersey might have taken the worst impact. The Garden State ranked in the top 10 lists for reported mortgage fraud, potential collusion activity, and percentage of properties in default in 2012, giving it a number of problems to tackle as it heads into an era of heightened regulation.

The number of filings related to suspicious activity for mortgage loan fraud fell year-over-year, while mortgage fraud related to foreclosure rescue scams spiked, according to a recent report from the Financial Crimes Enforcement Network (FinCEN). Last year, mortgage loan fraud (MLF) suspicious activity report (SAR) filings decreased to 69,277, down 25 percent from 92,561. However, the number of MLF SARs related to foreclosure rescue scams increased to 4,427, up 58 percent from 2,799 in 2011.

A former 12-year federal fugitive who fled to Canada was sentenced to 11 years in federal prison for his leading role in a fraudulent scheme that delayed hundreds of foreclosure sales, according to a statement Tuesday from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

A North Dakota judge sentenced two officers from an Arizona mortgage originator for their roles in a $28 million scheme to defraud North Dakota-based BNC National Bank.

A past president from DocX LLC was sentenced to five years in prison for her role in a scheme involving over one million fraudulently signed and notarized mortgage-related documents, the Justice Department announced Tuesday.

In its latest quarterly Mortgage Fraud Risk Report, Interthinx revealed first-quarter mortgage fraud risk was up 1 percent over last quarter and was unchanged from the same quarter in 2012. California was the riskiest state in the nation, boasting a mortgage fraud risk index of 125. In addition, four of the top 10 riskiest ZIP codes and five of the top 10 riskiest metropolitan statistical areas (MSAs)--including Santa Barbara-Santa Maria-Goleta, the top riskiest metro--call the Golden State home.

Two men who allegedly operated online foreclosure rescue businesses pleaded guilty to conspiracy charges, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced in a statement. According to the statement, Mark S. Farhood of San Diego and Jason S. Sant of Lecanto, Florida co-owned Home Advocate Trustees, which also went by several other names. Farhood and Sant claimed their businesses purchased distressed real estate to help homeowners avoid foreclosure.

Most mortgage fraud takes place in the short sale and REO space, according to Rob Hagberg, associate director of fraud investigations at Freddie Mac. ""This area is ripe with fraud,"" he said during a webinar hosted by CoreLogic. While servicers and others in the industry have adapted to some fraud schemes and put measures in place to detect and prevent fraud, schemes continue to evolve as fraudsters find new ways to manipulate sales. Both short sale and REO fraud often require fraudsters to convince servicers a home is worth less than it actually is.

A former senior bank official of a Delaware bank that received government funds pleaded guilty to bank conspiracy fraud, according to a joint announcement from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the U.S. Attorney's office for Delaware.