New Funding for Enforcement Efforts
Detecting mortgage fraud is a mind-set, like exercising or eating right. Habits are born of routine and the surest way to start spotting fraud is to become aware of its existence. Only then will we start to believe it exists. When we believe in the existence of fraud, we can then start taking active steps, every day, to combat against it. It may be an everyday battle, but the longer we fight the stronger we get, and once something becomes a habit the less difficult it is to achieve; and the harder it is to forget.
The Representatives of the Financial Fraud Enforcement Task Force, including Attorney General Eric Holder, met in Phoenix for the second of a series of Mortgage Fraud Summits. The task force, established by President Barack Obama in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes, is comprised of representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement.
The Attorney General announced that new investments included in the FY 2010 budget will soon be distributed to combat mortgage fraud. This spring, nearly $8 million for mortgage fraud enforcement and related efforts, including task forces, will be allocated for this work, including $1.7 million to Arizona.
A recent study from the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) study indicated that the Phoenix metropolitan area is ranked fourth in the nation for the number of Suspicious Activity Reports (SARs) filed by depository institutions concerning suspected mortgage fraud. In addition, according to the U.S. Department of Housing and Urban Development, Arizona is ranked number one for homes that were funded by Federal Housing Administration loans and have been foreclosed upon.
"Today's summit marks another important step in our nation's most aggressive, comprehensive, and collaborative effort to combat mortgage fraud and protect American homeowners," said Attorney General Holder. "Here in Phoenix, and in cities across the country, mortgage fraud crimes have reached crisis proportions. But we are fighting back, and with the Financial Fraud Enforcement Task Force that President Obama created last November, we're tackling the challenges and consequences of mortgage fraud in bold, innovative and coordinated ways.
“We have one message to those who would engage in mortgage fraud schemes: you will be found, you will be prosecuted, and you will be punished."
"We welcome the opportunity to combine forces with federal agencies to attack the serious problem of mortgage fraud in Arizona," said Arizona Attorney General Terry Goddard. "Arizona is ground zero in the foreclosure crisis, which plays a large role in our state's economic downturn. This crisis has been exacerbated by the deceptive practices of lenders in originating and servicing loans and fraudulent mortgage rescue scams that prey on borrowers desperate to hang on to the American dream of owning a home. "
Task force members met today with Phoenix area community leaders, legal services providers, banking, mortgage and real estate industry representatives and law enforcement officials to discuss this problem of mortgage fraud from a national, state and local perspective. In the morning, attendees participated in panels on mortgage fraud trends in Phoenix and the community impact of mortgage fraud. In the afternoon, task force representatives are meeting privately with law enforcement officials involved in the investigation of mortgage fraud.
Mortgage fraud is a key focus of the Financial Fraud Enforcement Task Force's efforts. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
As you know real estate is a people profession. From the real estate agents in the field to the loan officers or loan processors working with borrowers to the title agents sitting down with families closing on their first home, we are people serving people.
Those who would commit fraud know this, perhaps even better than we do…
In addition, like those of us who are legitimately doing good business in the real estate finance industry, they need people to pull off their scams. What kind of people? Willing people, that’s who. People willing to help them lie, people willing to buy shell properties or willing to work for shell corporations or willing to fake facts and figures and forms. They can’t do it alone, and more often than not, they come to us for help.
The sad part is that some of us don’t even realize when we’re being included in a fraudulent scheme. I believe some of this is partly due to ignorance, other times it is out of laziness, more times than not in the hustle and bustle of our daily lives it’s out of sheer Busy-ness, but sometimes it is simply due to a “don’t ask, don’t tell” policy that is quietly eating away at the very integrity of the home financing industry.
We must be vigilant against fraud, recognizing its signs and taking proactive, definite, and realistic steps to not only prevent it but also punish it.
It starts with me.
It starts with you.
It starts with us…
If you are a victim or know of a fraud happening of this type and want to file a complaint, please submit information to your local FBI office.
You may also file a complaint with HUD-OIG at www.hud.gov/complaints/fraud_waste.cfm or by calling HUD’s Hotline at 1-800-347-3735.
Michael S. Richardson
Director/Mortgage Fraud Services
Author of "An American Epidemic, Mortgage Fraud a Serious Business"
Follow me on Twitter “FocusonFraud”
Mortgage Fraud Summit-New Funding for Enforcement Efforts –
“We have one message to those who would engage in mortgage fraud schemes: you will be found, you will be prosecuted, and you will be punished." said Attorney General Holder.
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