FBI Expected to Arrest Hundreds for Mortgage Fraud This Week

NewImage.jpgThe Financial Times is reporting the Federal Bureau of Investigation is preparing a nationwide crackdown on mortgage fraud and could arrest hundreds of people across the US this week.

Citing two people familiar with the operation, the FT said the arrests will include people who encouraged borrowers to falsify income on mortgage applications, misleading home owners about foreclosure rescue programmes, and inflating home appraisals.

According to the FT:

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Since October 2008, the FBI has opened 23 local mortgage fraud task forces around the country with the purpose of curtailing the illegal misstatement, misrepresentation or omission of material facts on mortgage applications.

Such misstatements and omissions helped to fuel the housing bubble by allowing brokers, banks and other lenders to issue loans to borrowers with unverified income and low credit scores.

Many of these borrowers could not afford the loans and once the housing market started to deflate they stopped making interest and principal payments. More recently, mortgage fraud has involved foreclosure schemes in which financial firms collect a fee for falsely promising to help borrowers stay in their homes.

FBI to target mortgage fraud (Subscription Required)

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  • Yes, what of the mortgage fraud that took place 2003 to 2007? All financial institutions that partook of fraudulent practices during that period should be investigated and brought to justice. Big or small, those institutions need to be held accountable.

  • The investigations began in October, 2008, when the first task forces were assembled. The interest, on the part of law enforcement, in mortgage fraud began when people started losing money or their homes. No one cared when everyone was getting bailed out by “the market.”

  • The investigations began in October, 2008, when the first task forces were assembled. The interest, on the part of law enforcement, in mortgage fraud began when people started losing money or their homes. No one cared when everyone was getting bailed out by “the market.”

  • Wondering how i would find out if my grandmother’s very confusing reverse mortgage was or is fraudulently set up? Any legal recommendations on who or how to contact? Thank you

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