Fraud Continues to Plague Distressed Home Owners

Didn’t take long….but it appears that “distressed-homeowner schemes have displaced loan-origination fraud as the most common type of mortgage fraud”. This is according to the FBI. I can already tell you that the next wave of fraud will be when the pirates embark on a Quiet Title fraud scheme…Arrrrgghhh matey!!! LOL I recently spoke at a national conference for title companies. The FBI had at least 12 agents in the conference because they are serious about investigating fraud. Anyway, back to the distressed home owner situation. The Federal government is handling this new threat to the financial security of distressed home owners. It has already charged 530 people for “allegedly defrauding more than 73,000 homeowners who had fallen behind on their mortgage payments”. The foreclosure-rescue scams hinged on “fake…programs” that charged fees in exchange for negotiation of mortgage terms, purchase of the mortgage by often-hypothetical investors who would allow the homeowner to remain in the home, or other foreclosure alternatives. Why is this not a surprise?? The 530 individual charges are just one way that the federal government is hoping to show that it will protect “ordinary homeowners,” explains FBI associate director Kevin Perkins. Federal entities are also investigating lenders of all sizes. Many of us are already aware of the settlement that 49 of 50 state attorneys general executed. The resolution settled foreclosure fraud allegations with the five biggest banks in the country last February. The amount of the settlement was $25 billion. However very little of this money actually will go to distressed home owners, but that is another story for another day. Approximately, $14 billion of that went to the plaintiffs in the underlying cases. The reaming $12 billion is a proverbial “drop in the bucket” when you consider that there is about $13 TRILLION in home debt. Housing and Urban Development (HUD) believes that “Each of these efforts sends the same message,” said HUD secretary Shaun Donovan in a press conference recently. Donovan continued, “when it comes to harming homeowners, no one is above the law.” It is unfortunate that people try and illegally profit from the misfortune of others. A week does not pass that I do not her about something new and illegal!! Paddy Deighan J.D. Ph.D http://www.homesavers.pro