Tag Archives: Fraud

After remaining relatively flat for about a year, mortgage fraud is on the rise again, according to CoreLogic. All categories of mortgage fraud increased year-over-year in the first quarter of 2012, with employment fraud taking the lead with a 50 percent increase. CoreLogic attributes this rise to continued high levels of unemployment across the nation combined with low mortgage rates, incentivizing homeowners to misrepresent their employment status on loan applications. In an environment of increasing distressed sales, CoreLogic also sees heightened risk for short sale fraud.

The Securities and Exchange Commission (SEC) has ended its investigation of potential fraud in offering documents for mortgage-backed securities (MBS) sold by Wells Fargo, Bloomberg reports. The biggest home lender in the country announced in a regulatory filing that the SEC notified the bank on November 20 that the agency was ending its probe without enforcement.

Lorraine Brown's legal drama continues as Michigan attorney general Bill Schuette announced the filing of a felony charge against the former DocX president. Brown is being charged with one count of conducting criminal enterprises (racketeering) for her alleged role in authorizing the fraudulent signing of mortgage documents filed in the state.

The national mortgage fraud index fell to the lowest level in two years after spiking in the previous quarter, according to data from Interthinx. The mortgage fraud index dropped to 137 in the third quarter of this year, down 7.7 percent from the previous quarter and 4.5 percent from the same quarter a year ago. The number of metropolitan areas in the very high risk category also declined, falling to 70 in the third quarter from 91 in the second quarter. But, just two states--California and Florida-- accounted for more than half of the very high risk metros.

JPMorgan Securities LLC and Credit Suisse Securities (USA) paid a combined $416.9 million to settle charges of misleading investors in the sale of residential mortgage-backed securities (RMBS), the Securities and Exchange Commission (SEC) announced. According to the SEC's complaint against JPMorgan, the bank misstated information about the delinquency status of mortgages that provided collateral for an RMBS offering it underwrote. JPMorgan received fees of more than $2.7 million, and investors sustained losses of at least $37 million on undisclosed delinquent loans, the SEC says.

Two former executives of American Mortgage Specialists Inc. pled guilty Friday in a federal court in North Dakota for their part in a $27 million bank fraud scheme that put BNC National Bank at risk, according to a release from the Justice Department.

A Virginia man received a sentence of 14 years in federal prison for carrying out elaborate and sophisticated fraud schemes that took millions away from investors and the government, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced.

A Manhattan real estate attorney was sentenced to 51 months in prison for his role in a $9 million mortgage fraud scheme, Manhattan U.S. Attorney Preet Bharara announced Friday. U.S. District Judge Naomi R. Buchwald sentenced Eric Finger, 47, of Mineola, New York, in Manhattan federal court. Through Finger's scheme, he and his co-conspirators fraudulently obtained more than $9 million in mortgage loans to purchase dozens of residential properties throughout New York City and Long Island, with most of the loans going into default, according to a release.

Three mortgage relief companies are in hot water after the Federal Trade Commission (FTC) charged them with using deceptive tactics to prey on distressed homeowners. The FTC filed three separate suits against Prime Legal Plans, American Mortgage Consulting Group, and Expense Management America for allegedly violating its Mortgage Assistance Relief Services (MARS) Rule, which prohibits certain practices commonly used by fraudulent mortgage assistance companies.

The long-running legal proceedings between MBIA Insurance Corporation and Countrywide Home Loans (acquired in 2008 by Bank of America) turned into a blame game Friday as the companies battled over liability for insurance losses on bad loans.