Tag Archives: Mortgage Fraud

Experts anticipate that fewer fraudsters will move on residential mortgage originations over the remainder of the year, drawing a contrast with the number of times alleged perpetrators bilked lenders and homeowners over 2010, according to a new report. Releasing the study, CoreLogic offered up predictions that originations will fall to $7.4 billion over 2011 even as more people find new ways to defraud their victims. CoreLogic chalked up less fraud to simple economics.

Standard & Poor's is coming under heavy scrutiny from the Securities and Exchange Commission for it alleged misconduct in handling valuations for a $1.6 billion mortgage-bond deal. Regulators for the SEC are focusing on the company's possible exploitation of fictitious assets when rating the transaction in question. The bond deal became a debacle during the financial crisis, and this week, S&P's parent company, McGraw-Hill Cos., received notice from the SEC that it could be facing civil charges related to its potentially fraudulent actions.

A suit filed Monday dispelled any notion that the Taylor Bean & Whitaker scandal ended with the lockup of the former ringleaders, according to multiple news reports. The trustee overseeing bankruptcy and liquidation proceedings for the now-defunct mortgage company went after auditors for failing to see red flags in their accounting processes. Deloitte & Touche LLP, the accounting firm responsible for audits at Taylor Bean & Whitaker, got slapped with suits on the hunt for $7.6 million in damages, according to news outlets.

Crooked cops, money-launderers, and criminal enterprises have made headlines in the mortgage business recently, with state and federal officials nabbing dozens for diverse fraud schemes.

Even as the good news emerged that fewer banks are failing countrywide, Bloomberg News found that the nation's biggest lenders have lost some $65.7 billion in bad mortgage-backed securities, with billions in the red. A number of suits by mortgage lenders, one against the other, plus a barrage of action to recover losses for Fannie Mae and Freddie Mac suggest more losses may be in store for U.S. financial institutions. Market watchers disagree over whether culpability is needed in lieu of the bad economy.

If recent remarks by Treasury adviser Raj Date signal anything, the Consumer Financial Protection Bureau means to press forward with the responsibilities enshrined for it under the Dodd-Frank Act. The CFPB holdover, who filled the shoes of Elizabeth Warren, now a Senate candidate, explored events in the lead-up to the controversial bureau even as an unwavering Republican opposition holds the line. Assuming responsibility for 18 consumer financial laws, the CFPB has moved forward with rules and proposals.

The phrase family business found a new meaning this week as arrests and jail sentences followed for two men and their children that authorities corralled for bilking lenders and homeowners. Also making the mortgage fraud blotter Friday: five businessmen from Iowa and over a dozen defendants from Miami. The victims included a widow, homeowners in distress, and lenders. MReport pooled the latest in mortgage fraud news from cases nestled in the pages of newspapers from around the country.

In another twist for the nation's largest mortgage lenders, Wells Fargo upped the ante against JPMorgan Chase & Co. by filing a suit in a Delaware court to order the latter to buy back over $558 million in bad mortgage-backed securities. Multiple news outlets offered up the latest tizzy Thursday, with Wells escalating the case after JPMorgan refused to budge on the repurchases. The loans stem from the Bear Stearns Mortgage Funding Trust 2007-AR2, otherwise known as the EMC unit, which JPMorgan acquired in 2008.

More mortgage brokers, loan officers, and others chose Minnesota over all other states in which to bilk homeowners and lenders, placing the northern state first for mortgage fraud activity and making it the most unlikely hotspot for criminal behavior. An index released by MortgageDaily.com bore witness to a 27-percent surge in mortgage fraud activity for the North Star State over the second quarter, with other contenders seeing a rise in fraudulent behavior quarter-over-quarter.

Mortgage fraud cases showed few signs of slowing, with defendants either receiving their sentences or pleading guilty in Alabama, California, and New Jersey. The defendants allegedly bilked millions out of lenders.