Frank A. Rubino , ESQ.

FEDERAL AND INTERNATIONAL CRIMINAL DEFENSE

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Mortgage Fraud Cases Snare 530 Defendants

Federal authorities had a busy two weeks. In addition to the 92 defendants charged in a $432 million healthcare fraud bust last week, the government is now pursuing 530 people for mortgage fraud. The government claims that these defendants cost 73,000 homeowner victims around $1 billion.

These prosecutions come in the midst of a broad push against mortgage fraud in the wake of the 2008 real estate meltdown. In the words of United States Attorney General Eric Holder, "these comprehensive efforts represent an historic government-wide commitment to eradicating mortgage fraud and related offenses across the country."

Many of the alleged fraudulent schemes involved mortgage rescue plans. As foreclosures increased during the recession, opportunities for fraud allegations also rose. The line between an innovative foreclosure rescue plan and a potential fraud can be blurry at times. Some of these cases look more like deliberate plots.

One example of a suspected scam involves investors who offer to prevent foreclosures by charging a fee and assuming mortgages or titles. Another common form of mortgage fraud involves providing false information to mortgage lenders to secure a larger loan.

Federal authorities launched 285 criminal cases and 110 civil matters as a result of these investigations. This bust is another example of the federal government's strong focus on large fraud cases across the country.

Source: Bloomberg, "U.S. Charges 530 in Mortgage Probe With $1 Billion in Losses," Phil Mattingly, Oct. 9, 2012

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