http://news.yahoo.com/s/ap/20080619/ap_on_go_ca_st_pe/mortgage_fraud
Hundreds swept up in mortgage fraud arrests
By LARA JAKES JORDAN, Associated Press Writer Thu Jun 19, 12:26 PM ET
WASHINGTON - More than 400 real estate industry players have been indicted since March β including dozens over the last two days β in a Justice Department crackdown on incidents of mortgage fraud nationwide that have contributed to the country's housing crisis.
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The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion.
"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind to millions of Americans," Deputy Attorney General Mark Filip said in a statement Thursday. The Justice Department and FBI planed to announce the cases at an afternoon news conference in Washington.
Since March 1, 406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.
In a separate sweep, two former Bear Stearns managers in New York were indicted Thursday, becoming the first executives to face criminal charges related to the collapse of the subprime mortgage market.
Across the country, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed and defaults and foreclosures soared.
Banks reported nearly 53,000 cases of suspected mortgage fraud last year, up from more than 37,000 a year earlier and about 10 times the level of reports in 2001 and 2002, according to the Treasury Department's Financial Crimes Enforcement Network.
The most common type of mortgage fraud was misstatement of income or assets, followed by forged documents, inflated appraisals and misrepresentation of a buyer's intent to occupy a property as a primary residence.
Over the last several months, the FBI has been investigating an estimated 1,300 mortgage fraud cases β including 19 involving subprime lending practices by U.S. financial institutions.
The Justice Department also is expected to ask Congress for more money to help combat mortgage fraud as part of a larger funding request to curb white collar crime and violent crime.
Pilgrim
What I find weird is that it makes it seem like there are laws in place regarding mortgages and that some people broke these laws and are now being held accountable.
I was under the impression that there were no laws in the mortgage industry which is why we need the Federal Government to come in and take control. You know, like they're supposed to.
Anyhow, on a more serious side. If there was fraud committed by these people, doesn't that mean that the contracts and mortgages could possibly be void? While I'm not surprised that people were doing some of the things mentioned in the articles to get mortgages to go through that shouldn't have, I have a hard time believing that all of the people taking out mortgages had no idea that they were not being truthful in the matter either and wonder how far these investigations are going.
1"While I'm not surprised that people were doing some of the things mentioned in the articles to get mortgages to go through that shouldn't have, I have a hard time believing that all of the people taking out mortgages had no idea that they were not being truthful in the matter either and wonder how far these investigations are going."
This is what I am wondering. I know people (the homeowners) who were quite aware of the smudging of documents. Are they going to be held accountable?
Absolute power, corrupts absolutely.
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