Mortgage scam crackdown earns praise
WASHINGTON — Since early 2010, a leading civil rights group has helped compile a database of approximately 26,000 complaints about mortgage modification scams – attempts by fraudsters to take advantage of those hardest hit by the housing market meltdown.
The people making those complaints have reported losses of $63 million to the National Loan Modification Scam Database. And the Lawyers' Committee for Civil Rights Under Law, which manages the database, has filed 10 civil suits in conjunction with other organizations to try to halt mortgage assistance operations in California and New York.
The group said it was happy to hear that federal officials were cracking down on the scams with criminal charges, which adds another dimension to the fight in addition to civil fines.
“For some of these folks, the fines might be the cost of doing business,” said Yolanda McGill, senior counsel in the Fair Housing and Lending Project at the lawyers' group. “So the risk of jail time is important in all the efforts going on to stop this.”
U.S. Attorney General Eric H. Holder and other officials on Tuesday said the government's Distressed Homeowner Initiative had filed criminal charges against 530 people during the fiscal year that ended Oct. 1. The defendants were accused of defrauding about 73,000 underwater homeowners of a total of $1 billion nationwide.
“Distressed homeowner schemes have displaced loan origination fraud as the most common type of mortgage fraud in many areas of the country,” said Kevin Perkins, the FBI's associate deputy director, who was among the officials announcing the results of the crackdown.
In addition to criminal charges, there have been 110 federal civil cases filed against more than 150 defendants. Those cases allege that an additional 15,000 victims were bilked out of a combined $37 million by mortgage-assistance scams.
Even as the housing market shows signs of a rebound, the stream of complaints about those scams has continued, McGill said. The database received 1,005 complaints in September.
“This type of fraud is a little bit like Whac-A-Mole, and these outfits engaged in this are making money hand over fist,” she said.
The database is a project of the Loan Modification Scam Prevention Network, a national coalition of government agencies, nonprofit organizations and service providers that includes the Department of Housing and Urban Development, Fannie Mae and Freddie Mac.
Federal officials, who have access to the database, told the lawyers' group this year that they were going to focus more on fraud against distressed homeowners, said Linda Mullenbach, also a senior counsel in the Fair Housing and Fair Lending Project.
“Any type of assistance to shut these operations down is very much valued,” she said.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pittsburgh’s tech startup activity rates last of 40 metro areas in report
- After years of downsizing, big houses make comeback
- Floating homes offer ‘affordable’ option in San Francisco area
- Importance stressed of securing your online banking
- Corporate America speaking out on social issues, getting results
- New J.C. Penney CEO comes from middle-income America
- How to land that 1st job after college
- Truffle dogs sniff out pungent fungus prized by foodies
- Aetna to buy rival Humana for $35B
- Pope’s South American homecoming to spotlight poor, environment
- McDonald’s localizes menus to battle growing competition