Tag Archives: Mortgage Fraud

A jury has convicted Maryland woman Annika Boas for her role in a residential mortgage fraud scheme. According to an announcement from U.S. Attorney Rod Rosenstein, Boas stood accused of working with other defendants to falsify or steal identity documents to secure residential mortgage loans.

Selim Zherka, a resident of Somers, New York, was arrested by federal agents on Thursday and charged with falsifying information to obtain loans totaling more than $146 million from three banks: North Fork Bank (now Capital One), Sovereign Bank (now Santander), and Signature Bank, according to an announcement from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

Interthinx reported a 1 percent decline in its national Mortgage Fraud Risk Index from the fourth quarter of 2013 to the first quarter of 2014, bringing the index's value down to 100. Three of the component indices—measuring identity fraud, occupancy fraud, and employment and income fraud—came down over the quarter. The remaining component, property valuation fraud, surged up 27 percent to an index value of 128.

A mayor in the Miami area has been suspended by Florida Gov. Rick Scott following a federal indictment alleging mortgage fraud. According to a report from the Miami Herald, North Miami Mayor Lucie Tondreau was suspended Tuesday after appearing in court to face charges related to her role in an $8 million fraud scheme.

Four California men have been indicted on federal charges of conspiracy, bank fraud, wire fraud, and more in a case relating to the collapse of the Sonoma Valley Bank in August 2010. According to a release from the Special Inspector General for the Troubled Asset Relief Program, the accused allegedly "skirted the bank's internal controls and defrauded Sonoma Valley Bank by authorizing the bank to lend $9.5 million to a straw purchaser."

Interthinx, a subsidiary of First American Financial Corporation, annually studies loan applications processed by its FraudGUARD system to determine the riskiest places in the country for mortgage fraud. What it found from its study of applications in 2013 was that fraud risk nationally rose by 4 index points to a total of 104. This continues the rising trend in fraud risk observed over the past three years as inventories shrink, prices rise, and markets stabilize.

An audit conducted by the inspector general for the Justice Department found that, despite public statements to the contrary, mortgage fraud isn't a highly prioritized issue. FBI field offices visited by the Office of the Inspector General, including Baltimore, Los Angeles, Miami, and New York, listed mortgage fraud to be a low priority—if it was listed as one at all.

Per new regulations finalized last week, the GSEs will be required to file suspicious activity reports (SARs) directly with the Financial Crimes Enforcement Network (FinCEN) rather than through their own regulator. Developed in coordination with the Federal Housing Finance Agency (FHFA), FinCEN’s final rule is intended to provide law enforcement and regulators with a more complete picture of mortgage fraud than that offered by less detailed reports currently provided to FHFA.

As if this month's regulatory changes weren't enough, lenders have another problem to grapple with: According to stats released by Kroll Factual Data, incidents of potential mortgage fraud are on the rise. Between the second and third quarters of 2013, the company recorded a 10.4 percent average increase in "possible fraudulent activity" in loan applications submitted for review. "The call for increased vigilance and processes for mitigating this risk is at a pitch not to be discounted or ignored," said Kroll president Rod Bazzani.

Legal actions on mortgage fraud cases fell to a post-crisis low in 2013's third quarter, Mortgage Daily reported in its quarterly Mortgage Fraud Index. The index, which tracks motions and decisions on cases in which lenders are given false information for the loan decision process, was 655 in Q3, the lowest value since the fourth quarter of 2007. Despite the overall decline, certain states remain hot spots for fraud; According to the site, California had the highest third-quarter index value, and Nevada's index climbed again.