Mortgage Fraud Background Information
Robert E. Casey Jr., Special Agent In
Charge, Dallas FBI, provides the following information
for background purposes:
The FBI and Department of Justice formulated Operation
Malicious Mortgage (OMM) in response to the rapidly
escalating mortgage fraud crime problem. This initiative
was a multi-agency coordinated national mortgage fraud
effort. From March 1 to June 18, 2008, Operation Malicious
Mortgage resulted in 144 mortgage fraud cases in which
406 defendants were charged, convicted, or sentenced
On June 18, 2008, 60 arrests, nationally, were
conducted. The FBI estimates that approximately $1
billion in losses were inflicted by the mortgage fraud
schemes employed in these cases.
On June 18, 2008, as part of the Operation Malicious
Mortgage initiative, the Dallas FBI executed arrest
warrants on eight of 11 individuals sought
in a mortgage fraud scheme. As reported yesterday,
these individuals were Eric Rulack Farrington, Jr.,
Regis Lamont Williams, Kevin Ray Sanderson, Tony Earl
Anderson, James Edward Jones, Edwin Terrence Bell,
Robert John Mason, and Christopher N. Williams. Today,
a ninth individual, Michael Lewis Andrews, surrendered
himself to federal authorities.
Data collected from the FBI, other law enforcement,
and industry sources were compared to determine which
states were most affected by mortgage fraud in 2007.
The top 10 mortgage fraud states for 2007 were identified
as follows: Florida, Georgia, Michigan, California,
Illinois, Ohio, Texas, New York, Colorado, and Minnesota.
Forty-one Mortgage Fraud Task Forces or Working
Groups addressing Mortgage Fraud have been created.
The North Texas Mortgage Fraud Working Group is one
of the 41.
The following agencies participate in the North Texas
Mortgage Fraud Working Group:
-
FBI Dallas
-
Internal Revenue
Service (IRS)
-
Housing and Urban
Development, OIG (HUDOIG)
-
U.S. Secret Service
(USSS)
-
U.S. Postal Inspection
Service (USPIS)
-
Federal Deposit
Insurance Corporation (FDIC)
-
Bureau of Immigration
and Customs Enforcement (BICE)
-
Texas Attorney General's
Office
-
Dallas County District
Attorney
-
Tarrant County
District Attorney
-
Collin County
District
Attorney
-
Rockwall
County
District Attorney
-
Denton
County
District
Attorney
-
Kaufman County
District Attorney
-
Ellis County
District Attorney
-
Texas Department
of Insurance
-
Texas Appraisal
and Licensing
Board
-
Texas Real
Estate Commission
Each mortgage fraud scheme contains some type of material
misstatement, misrepresentation, or omission relied
upon by an underwriter or lender to fund, purchase,
or insure a loan. The most common form of mortgage
fraud involves illegal property flipping which entails
false appraisals and other fraudulent loan documents.
Many mortgage fraud schemes are based upon or incorporate
some form of illegal property flipping. Emerging and
re-emerging schemes in 2007 included builder-bailouts,
seller assistance, short sales, foreclosure rescue,
and identity thefts exploiting home equity lines of
credit.
What should homeowners do to avoid these schemes?
-
Get referrals for real
estate and mortgage professionals. Check the license
of the industry professional with
state, county, or city regulatory agencies.
-
If it
sounds too good to be true, it probably is. An
outrageous promise of extraordinary profit in
a short
period of time signals a problem.
-
Be wary of strangers
and unsolicited contacts, as well as high-pressure
sales techniques.
-
Look
for written information to include recent comparable
sales in the area, and other documents
such as tax
assessments to verify the value of the property.
-
Understand what you
are signing and agreeing to. If you do not understand,
re-read the
documents, or seek
assistance from an attorney.
-
Make sure the name
on your application matches the name on your identification.
-
Review
the title history to determine if the property
has been sold multiple
times
within
a short period.
It could mean that this property has
been “flipped” and
the value falsely inflated.
-
Know and
understand the terms of your mortgage.
Check your information against
information
in the loan documents
to ensure they are accurate and
complete.
-
Never sign any loan
document that contains blanks. This leaves you
vulnerable
to fraud.
