Tag Archives: Mortgage Fraud

Sparking indignation in the mortgage broker community, Raj Date, deputy director of the Consumer Financial Protection Bureau, laid the bulk of the blame for the housing crisis on brokers during a speaking engagement Monday. His statements have led at least one industry trade group to call for his resignation. Marc Savitt, president of the National Association of Independent Housing Professionals, called Date's comments "outrageous." He said the group will call for the official's resignation this week.

Interthinx released its quarterly Mortgage Fraud Risk Report Wednesday, showing that the national Mortgage Fraud Risk Index has dropped below the 140 mark for the first time since 2009. The report, put together by an internal team of fraud experts at Interthinx, showed that the National Mortgage Fraud Risk Index decreased to 139, 4.3 percent down from last quarter, 3.1 percent from the first quarter of 2011, and lower than it has been since the second quarter of 2009. The number of "very high risk" metropolitan statistical areas also fell.

A task force created by the Obama administration to crack down on residential mortgage-backed securities misconduct recently went live with a new website for whistleblowers. The Residential Mortgage-Backed Securities Working Group established the online portal for those willing to air grievances about misconduct in the packaging and sale of mortgages into securities at financial institutions. The Justice Department launched the RMBS Working Group earlier this year to look into allegations of misconduct.

In the United Kingdom, Experian Identity & Fraud is reporting another annual uptick in mortgage fraud, recently revealing statistics that showed an eight percent rise in incidences of fraud during 2011. The company's survey marks the fifth consecutive year during which the rate of mortgage-related fraudulent activity has increased. Experian's findings indicate that an estimated 34 of every 10,000 mortgage applications contained false information in 2011. The results of the study represent a significant elevation of numbers seen in 2006.

Financial institutions filed 31 percent more suspicious activity reports for mortgage fraud in 2011 than in the year before, according to the Financial Crimes Enforcement Network. The agency released updates that showed lenders submitted 92,028 reports for suspected mortgage fraud activity in 2011, up from 70,472 seen in 2010. The report tracked increases alongside declines from the fourth quarter, observing a 9 percent decrease in suspicious activity reports by yearend 2011.

A brokerage owner and three mortgage loan officers in New York faced future in prison Thursday as the authorities prepared to sentence the former and the latter pled guilty to mortgage fraud. MReport culled the latest accounts of fraud from a news publication and the Federal Bureau of Investigation. Of the three loan officers, one may reportedly face up to 30 years in prison, while the other two each face 50 years. Tens of millions of dollars lost in their schemes resulted in loan defaults and bilked lenders.

The Mortgage Litigation Index for the final quarter of last year jumped to a record high according to recently released statistics. Findings from the index revealed that a rise in legal activity for the areas of criminal, servicing, and mortgage fraud served as the catalyst behind swelling litigation numbers. The total number of mortgage litigation cases during the fourth-quarter of 2011 increased to 244, representing just over a 10 percent uptick quarter-to-quarter. On a year-over-year basis, the case load rose dramatically from 151 during the fourth-quarter of 2010.

The Goldman Sachs Group Inc. has officially lost its bid to dismiss a lawsuit initiated by hedge fund Dodona I LLC over claims that the company misrepresented a $2 billion offering of collateralized debt obligations. U.S. District Judge Victor Marreno rescinded Goldman's move to have the case dismissed, and Dodona will now continue to pursue its legal proceedings against the company in federal court. Goldman is currently facing several lawsuits related to its RMBS offerings. Specifically, Dodona filed its lawsuit over Hudson Mezzanine Funding 2006-I and 2006-2 CDOs.

A Dallas-based lender lost privileges Friday when HUD announced that it had permanently banned it from underwriting and originating new mortgages backed by the Federal Housing Administration. Effective immediately, AmericaHomeKey, Inc., will no longer have the ability to churn out loans guaranteed by federal mortgage insurance. The department leveled a number of charges against AHK, claiming that it failed to properly document borrower eligibility for loans in accordance with closing costs, income requirements, and unallowable fees.

Consumer Financial Protection Bureau director Richard Cordray told a gathering of the nation's editors and journalists Friday that the agency needs their help to make consumers more aware of predatory lending hurdles. He highlighted efforts by the CFPB to increase transparency in the markets, underscored the role undertaken by lenders in the crisis, and played up the need for more regulation for servicers. The address by Cordray is the latest in a round of public appearances by the CFPB director, newly appointed by President Barack Obama in January.