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Combating Mortgage Fraud
November 9, 2009 Posted by

Combating mortgage fraud – one of the fastest growing white collar crimes – is an important element in the Justice Department’s mission to protect the public. The Department is partnering with state, local and tribal law enforcement to share information and provide the resources needed to successfully fight this type of crime, which can bring hardship to individual citizens and financial organizations alike. Attorney General Holder has personally met with various officials to directly address the problem, and in April announced a multi-agency crackdown targeting foreclosure rescue scams and loan modification fraud.

Last week, the U.S. Attorney’s Office for the Middle District of Florida announced the results of a nine-month-long “Mortgage Fraud Surge” investigation that has resulted in charges against more than 100 defendants and involves allegations concerning more than $400 million in loans procured by fraud, on more than 700 properties.

This announcement is just the latest of many such cases. At this time, there are federal mortgage fraud-related charges pending against approximately 500 defendants around the nation. The cases range from mortgage schemes designed to defraud mortgage lenders to “foreclosure rescue schemes,” which prey on distressed homeowners.

The Department of Justice’s Office of Justice Programs’ Bureau of Justice Assistance (BJA) has also been working on a multi – faceted approach to combating this problem. In January 2009, BJA convened a roundtable of local officials and private sector experts to learn about policies and operations to prevent, investigate, and prosecute mortgage fraud, as well as the local crime problems generated from the associated increase in foreclosures and vacant properties.

Based on information gleaned from the roundtable and using Recovery Act funds, BJA developed a grant program specific to mortgage fraud. To further state and local efforts, BJA awarded Recovery Act funds to increase the number of state and local investigators, prosecutors, and crime prevention practitioners. More than $10.75 million in Recovery Act funds will support regional mortgage fraud task forces, which are central to coordinating local, state and federal investigations and prosecutions. The list of grant recipients can be found here: http://www.ojp.gov/recovery/pdfs/byrnemortfraud.pdf

BJA also continues to work to address mortgage fraud through its Community Prosecution Initiative, which brings together local prosecutors, code enforcement and city government officials to tear down — or clean up and find owners for — vacant and abandoned houses that are often left to deteriorate after a mortgage fraud scheme has been carried out. Vacant properties invite disorder and criminal activity into communities, so decreasing the number of these properties, or restoring them to productive use can play a significant role in preventing and reducing neighborhood crime.

Additionally, BJA is working with federal partners in the FBI and the U.S. Attorneys Offices around the nation to coordinate state and local fraud training opportunities. The collaboration among federal, state and local law enforcement will facilitate a cohesive response on behalf of the affected communities. To learn more about BJA’s mortgage fraud initiative and other programs, visit the BJA Web site at www.ojp.gov/BJA.

Through these various efforts, the Department of Justice along with our federal, state, local and tribal partners, is working tirelessly to combat mortgage fraud. At a meeting with federal partner agencies and state Attorneys General in September, Attorney General Holder summed it up best when he said:

“Our efforts to attack mortgage fraud must be, and are, concerted and coordinated. Working together, we can send a clear and straightforward message: Those who prey on vulnerable American homeowners cannot hide from the hand of the law. If you perpetrate mortgage fraud, we will find you and we will bring you to justice.”

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