Mortgage fraud has risen for the past six years, according to the FBI. Since the housing market tanked in 2008, thieves have changed their focus from defrauding banks with bogus mortgages to preying on homeowners in financial trouble. The rise in criminal activity has spurred the Department of Justice to organize a campaign against the deceptions.
Assistant Attorney General Tony West spoke to accountants in Washington on Thursday, Sept. 16. “ I don’t have to tell you what a serious problem mortgage fraud is. It’s the type of fraud that strikes when people are most vulnerable, when they’re facing the loss of what is often the most important purchase of their lives.”
West said about 1.7 million homeowners received notices warning of potential foreclosures during the first six months of 2010. One million houses are likely to be foreclosed upon this year. Under pressure, people may turn to bogus offers of help that result in the loss of their houses, he said.
Elderly homeowners are targeted by reverse mortgage scams, which are especially egregious, “Taking those last dollars so sorely needed by so many in the sunset of their lives,” said West to the accountants. In a reverse mortgage, an older homeowner receives an income stream by borrowing against the equity in his house. The money does not have to be repaid until the house is sold.
Dishonest brokers have been siphoning borrowed money from reverse mortgages into their own accounts, tricking homeowners out of titles to their homes, charging for services or information that are normally free, or conning clients into borrowing more than their houses are worth, leaving them with unmanageable debts.
President Obama told the Department of Justice to form the Financial Fraud Enforcement Task Force, a coalition of state and federal law enforcement agencies that are investigating and prosecuting mortgage fraud.
West is co-chair of the Mortgage Fraud Working Group, a team within the task force. The group formed nine months ago and recently conducted a sweep against mortgage fraud, called “Operation Stolen Dreams.” The result has been the prosecution of over 200 civil actions against more than 1,200 defendants. So far, $147 million has been recovered.
West was speaking to the Association of Government Accountants’ Internal Control & Fraud Conference.
To learn more about mortgage scams, please visit: www.PreventLoanScams.org
Assistant Attorney General Tony West spoke to accountants in Washington on Thursday, Sept. 16. “ I don’t have to tell you what a serious problem mortgage fraud is. It’s the type of fraud that strikes when people are most vulnerable, when they’re facing the loss of what is often the most important purchase of their lives.”
West said about 1.7 million homeowners received notices warning of potential foreclosures during the first six months of 2010. One million houses are likely to be foreclosed upon this year. Under pressure, people may turn to bogus offers of help that result in the loss of their houses, he said.
Elderly homeowners are targeted by reverse mortgage scams, which are especially egregious, “Taking those last dollars so sorely needed by so many in the sunset of their lives,” said West to the accountants. In a reverse mortgage, an older homeowner receives an income stream by borrowing against the equity in his house. The money does not have to be repaid until the house is sold.
Dishonest brokers have been siphoning borrowed money from reverse mortgages into their own accounts, tricking homeowners out of titles to their homes, charging for services or information that are normally free, or conning clients into borrowing more than their houses are worth, leaving them with unmanageable debts.
President Obama told the Department of Justice to form the Financial Fraud Enforcement Task Force, a coalition of state and federal law enforcement agencies that are investigating and prosecuting mortgage fraud.
West is co-chair of the Mortgage Fraud Working Group, a team within the task force. The group formed nine months ago and recently conducted a sweep against mortgage fraud, called “Operation Stolen Dreams.” The result has been the prosecution of over 200 civil actions against more than 1,200 defendants. So far, $147 million has been recovered.
West was speaking to the Association of Government Accountants’ Internal Control & Fraud Conference.
To learn more about mortgage scams, please visit: www.PreventLoanScams.org
