Bank of America and Morgan Stanley have agreed to pay more than $22 million combined to settle federal civil charges on improperly foreclosing on military personnel, The Associated Press reports.
Between 2006 and 2009, the mortgage lenders foreclosed on 178 military members in 22 states without getting court approval. The military members affected will each receive $125,562, on average. The banks will also continue to investigate whether improper foreclosures occurred in 2009 through 2010.
The settlement is "easily the largest amount recovered" in a case of improper military foreclosures, Thomas E. Perez, an assistant attorney general, told The Associated Press.
The Servicemembers’ Civil Relief Act offers protections to military personnel to prevent foreclosures. It bans evictions or creditors trying to repossess their property while on active duty.
JPMorgan Chase earlier this year admitted to overcharging about 4,000 military personnel on mortgages and wrongly foreclosing on 14. It paid $2 million in settlement charges originally and last month paid more than $60 million to settle a class-action lawsuit regarding the overcharges.
Source: “2 Firms to Pay for Improper Military Foreclosures,” Associated Press (May 26, 2011)
Friday, May 27, 2011
Attorney General Kamala D. Harris Subpoenas Loan Processor LPS in Wide-Ranging Probe of Mortgage and Foreclosure Practices
LOS ANGELES - Attorney General Kamala D. Harris announced she has subpoenaed Lender Processing Services, Inc. (LPS), as part of her continuing probe into "robosigning" of mortgage documents and other illegal activities in the mortgage servicing industry, especially misconduct affecting borrowers facing, or in the midst of, foreclosure.
Robosigning is the practice of signing documents used by banks or mortgage servicing companies to foreclose on borrowers without verifying their accuracy - often thousands of different documents signed by a single individual per day. In many cases, the robosigners don't even read or understand the document they are signing.
"California homeowners have been exposed to fraud and crime at every step of the mortgage process," said Attorney General Harris. "Justice demands we come to their aid and a key step in that is to investigate robosigning and the potential for inaccurate or unjust foreclosures."
Former LPS employees have testified that LPS designees "robosigned" foreclosure documents. LPS prepared and recorded these foreclosure documents on behalf of many of the largest mortgage lenders and servicers in the country.
The Attorney General's investigative subpoena requires LPS to produce documents and provide written answers to questions from the Attorney General's office. The time period covered by the subpoena runs from Jan. 1, 2007, until just before the compliance date, which is no later than June 24 of this year.
LPS, based in Jacksonville, Fla., with several offices in California, provides loan management services to mortgage lenders, including document preparation services and a software platform used by much of the mortgage industry. According to its website, LPS systems are used for servicing over 50% of all mortgages in the United States and more than 80 financial institutions contract with LPS to service more than 30 million loans with an outstanding principal balance exceeding $4.5 trillion.
Attorney General Harris warned that the risks posed by robosigning are particularly dangerous in non-judicial foreclosure states such as California, where the courts typically are not involved in overseeing the foreclosure process.
On Monday, Attorney General Harris announced the creation of a Mortgage Fraud Strike Force, staffed by two dozen Department of Justice attorneys and investigators to monitor and prosecute violations at every step of the mortgage process, from the origination of mortgage loans to the marketing of mortgage-backed securities to the investing public.
Robosigning is the practice of signing documents used by banks or mortgage servicing companies to foreclose on borrowers without verifying their accuracy - often thousands of different documents signed by a single individual per day. In many cases, the robosigners don't even read or understand the document they are signing.
"California homeowners have been exposed to fraud and crime at every step of the mortgage process," said Attorney General Harris. "Justice demands we come to their aid and a key step in that is to investigate robosigning and the potential for inaccurate or unjust foreclosures."
Former LPS employees have testified that LPS designees "robosigned" foreclosure documents. LPS prepared and recorded these foreclosure documents on behalf of many of the largest mortgage lenders and servicers in the country.
The Attorney General's investigative subpoena requires LPS to produce documents and provide written answers to questions from the Attorney General's office. The time period covered by the subpoena runs from Jan. 1, 2007, until just before the compliance date, which is no later than June 24 of this year.
LPS, based in Jacksonville, Fla., with several offices in California, provides loan management services to mortgage lenders, including document preparation services and a software platform used by much of the mortgage industry. According to its website, LPS systems are used for servicing over 50% of all mortgages in the United States and more than 80 financial institutions contract with LPS to service more than 30 million loans with an outstanding principal balance exceeding $4.5 trillion.
Attorney General Harris warned that the risks posed by robosigning are particularly dangerous in non-judicial foreclosure states such as California, where the courts typically are not involved in overseeing the foreclosure process.
On Monday, Attorney General Harris announced the creation of a Mortgage Fraud Strike Force, staffed by two dozen Department of Justice attorneys and investigators to monitor and prosecute violations at every step of the mortgage process, from the origination of mortgage loans to the marketing of mortgage-backed securities to the investing public.
Thursday, May 26, 2011
Attorney General Kamala D. Harris Announces Creation of Mortgage Fraud Strike Force to Protect Homeowners
LOS ANGELES - Attorney General Kamala D. Harris today announced the creation of the California Attorney General's Mortgage Fraud Strike Force, staffed by Department of Justice attorneys and investigators charged with protecting innocent homeowners and bringing to justice those who defraud them.
Composed of both civil and criminal enforcement teams, the Mortgage Fraud Strike Force will monitor and prosecute violations at every step of the mortgage process, from the origination of mortgage loans to the marketing of mortgage-backed securities to the investing public.
"Californians in search of the American dream all too often found a protracted personal and legal nightmare," said Attorney General Harris. "Families are losing their homes, while those who perpetrated crimes and frauds against them walk free."
At her announcement of the new mortgage fraud unit, Attorney General Harris was joined by Mayor Antonio R. Villaraigosa, representatives from U.S. Department of Housing and Urban Development (HUD) and the Center for Responsible Lending, as well as homeowners harmed by unlawful lending, servicing and foreclosure practices.
"We will work to safeguard the homeowner at every step of the process - from origination of a loan to its securitization, and we will prosecute to the fullest extent of the law those who take advantage of trusting California families," said Attorney General Harris. "We are setting a high bar for other states and we insist that homeowners be protected, respected, and informed."
The Mortgage Fraud Strike Force will operate out of Department of Justice offices in Los Angeles, Fresno, San Francisco and Sacramento. Twenty-five attorneys and investigators will work together in three teams:
- The consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams.
- The criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief.
- The corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.
Los Angeles Mayor Antonio R. Villaraigosa offered his support of the new strike force. "With nearly 10,000 foreclosures in the City of Los Angeles last year," he said, "this strike force is certain to help countless residents and families from becoming victimized."
"The Attorney General's authority and attention to this issue brings a critical law enforcement component to the table that will help stop the practice of predatory lending once and for all," said Mayor Villaraigosa. "I applaud Attorney General Harris for her dedication to employing swift justice to the scam artists who prey on the residents of some of our most economically vulnerable neighborhoods."
California has been hit hard by the foreclosure crisis, and by predators who seek to profit from the millions of Californians who are underwater in their mortgages, in foreclosure, or at risk of entering foreclosure.
Last year alone, there were foreclosure filings against 546,669 California homes. It is projected that between 2009 and 2012, a total of 2 million California homes will enter the foreclosure process. In the last year, the California Department of Justice has received thousands of complaints related to foreclosure scams, mortgage fraud, and mortgage servicing practices.
"The fingerprints of illegal activity are all over the foreclosure crisis," said Paul Leonard, director of the California Office, Center for Responsible Lending. "The Attorney General's effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news."
Attorney General Harris has long been dedicated to prosecuting mortgage fraud. In 2009, as District Attorney of San Francisco, she launched the first stand-alone district attorney's mortgage fraud unit in California with $1.1 million from the U.S. Department of Justice.
If you are a homeowner who has been scammed, you can learn more or file a complaint online with the Attorney General's office at: http://oag.ca.gov/consumers.
Composed of both civil and criminal enforcement teams, the Mortgage Fraud Strike Force will monitor and prosecute violations at every step of the mortgage process, from the origination of mortgage loans to the marketing of mortgage-backed securities to the investing public.
"Californians in search of the American dream all too often found a protracted personal and legal nightmare," said Attorney General Harris. "Families are losing their homes, while those who perpetrated crimes and frauds against them walk free."
At her announcement of the new mortgage fraud unit, Attorney General Harris was joined by Mayor Antonio R. Villaraigosa, representatives from U.S. Department of Housing and Urban Development (HUD) and the Center for Responsible Lending, as well as homeowners harmed by unlawful lending, servicing and foreclosure practices.
"We will work to safeguard the homeowner at every step of the process - from origination of a loan to its securitization, and we will prosecute to the fullest extent of the law those who take advantage of trusting California families," said Attorney General Harris. "We are setting a high bar for other states and we insist that homeowners be protected, respected, and informed."
The Mortgage Fraud Strike Force will operate out of Department of Justice offices in Los Angeles, Fresno, San Francisco and Sacramento. Twenty-five attorneys and investigators will work together in three teams:
- The consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams.
- The criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief.
- The corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.
Los Angeles Mayor Antonio R. Villaraigosa offered his support of the new strike force. "With nearly 10,000 foreclosures in the City of Los Angeles last year," he said, "this strike force is certain to help countless residents and families from becoming victimized."
"The Attorney General's authority and attention to this issue brings a critical law enforcement component to the table that will help stop the practice of predatory lending once and for all," said Mayor Villaraigosa. "I applaud Attorney General Harris for her dedication to employing swift justice to the scam artists who prey on the residents of some of our most economically vulnerable neighborhoods."
California has been hit hard by the foreclosure crisis, and by predators who seek to profit from the millions of Californians who are underwater in their mortgages, in foreclosure, or at risk of entering foreclosure.
Last year alone, there were foreclosure filings against 546,669 California homes. It is projected that between 2009 and 2012, a total of 2 million California homes will enter the foreclosure process. In the last year, the California Department of Justice has received thousands of complaints related to foreclosure scams, mortgage fraud, and mortgage servicing practices.
"The fingerprints of illegal activity are all over the foreclosure crisis," said Paul Leonard, director of the California Office, Center for Responsible Lending. "The Attorney General's effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news."
Attorney General Harris has long been dedicated to prosecuting mortgage fraud. In 2009, as District Attorney of San Francisco, she launched the first stand-alone district attorney's mortgage fraud unit in California with $1.1 million from the U.S. Department of Justice.
If you are a homeowner who has been scammed, you can learn more or file a complaint online with the Attorney General's office at: http://oag.ca.gov/consumers.
Wednesday, May 18, 2011
HomeSteps® Launches National Summer Sales Promotion Offering Closing Cost Assistance, Selling Agent Bonuses
MCLEAN, Va., May 16, 2011 /PRNewswire/ -- HomeSteps, the real estate sales unit of Freddie Mac (OB: FMCC), is launching a nationwide sales promotion for its inventory of foreclosed homes starting today.
The HomeSteps Summer Sales Promotion is offering up to 3.5 percent buyer's closing cost and a $1,200 selling agent bonus for initial offers received between May 16, 2011 - July 31, 2011 and escrows are closed on or before September 30, 2011. This offer is valid only on HomeSteps homes sold to owner-occupant buyers.
A two-year Home Protect® limited home warranty that covers electrical, plumbing, air conditioning, heating and other major systems and appliances is offered on some eligible HomeSteps homes. Home Protect also provides discounts of up to 30 percent on the purchase of appliances. (Terms, conditions and limitations apply. Not all homes or borrowers will qualify. For details, see www.HomeSteps.com/smartbuy.)
For HomeSteps Summer Sales Promotion details and conditions, visit http://www.HomeSteps.com.
The HomeSteps Summer Sales Promotion is offering up to 3.5 percent buyer's closing cost and a $1,200 selling agent bonus for initial offers received between May 16, 2011 - July 31, 2011 and escrows are closed on or before September 30, 2011. This offer is valid only on HomeSteps homes sold to owner-occupant buyers.
A two-year Home Protect® limited home warranty that covers electrical, plumbing, air conditioning, heating and other major systems and appliances is offered on some eligible HomeSteps homes. Home Protect also provides discounts of up to 30 percent on the purchase of appliances. (Terms, conditions and limitations apply. Not all homes or borrowers will qualify. For details, see www.HomeSteps.com/smartbuy.)
For HomeSteps Summer Sales Promotion details and conditions, visit http://www.HomeSteps.com.
Wednesday, May 11, 2011
Hedge Fund Founder Convicted of Insider Trading
Raj Rajaratnam, founder of the Galleon Group, was found guilty Wednesday by a jury in New York of conspiracy and securities fraud. Having cultivated a series of contacts in various corporations, he used this illegally obtained information to make more than $60 million in profits and avoided losses.
Prosecutors say this is the largest insider trading case ever involving hedge funds. Rajaratnam faces a maximum term of more than 19 years in prison.
U.S. Attorney Preet Bharara said the verdict sends a message that white collar laws apply to everyone, "no matter how much money you have."
The defendant "was among the best and the brightest, one of the most educated, successful and privileged professionals in the country," Bharara said in a statement. "Yet, like so many others, he let greed and corruption cause his undoing."
Prosecutors say this is the largest insider trading case ever involving hedge funds. Rajaratnam faces a maximum term of more than 19 years in prison.
U.S. Attorney Preet Bharara said the verdict sends a message that white collar laws apply to everyone, "no matter how much money you have."
The defendant "was among the best and the brightest, one of the most educated, successful and privileged professionals in the country," Bharara said in a statement. "Yet, like so many others, he let greed and corruption cause his undoing."
Tuesday, May 10, 2011
Mortgage Fraud Reaches Record High
Scammers are taking advantage of the real estate market, changing their schemes to take advantage of a distressed real estate market. Reports of mortgage fraud in 2010 reached the highest level on record, the Treasury Department reports.
Suspected mortgage fraud activity increased nearly 5 percent to 70,472 “suspicious activity reports,” according to the Financial Crimes Enforcement Network. That’s up from 67,507 in 2009 (and a dramatic increase when compared to 37,000 mortgage fraud reports in 2006 during the housing boom). The agency estimates more than $1.5 billion in losses from mortgage fraud in 2010.
Mortgage fraud reports include everything from borrowers falsifying information on loan documents, fraudulent appraisals, to elaborate schemes that target home owners underwater on their mortgage.
Reports of suspected mortgage fraud have continued to rise since the housing boom.
However, while the number of reports of mortgage fraud continues to rise, the number of fraud cases have actually decreased, the LexisNexis Mortgage Asset Research Institute reports. Mortgage fraud cases dropped 41 percent between 2009 and 2010, the biggest drop since the institute began to track reports. The drop was attributed to a decrease in home loans from banks tightened lending standards.
"We've got lower originations, less loan volume, less attention being paid to in terms of what's happening to those loans, and tighter credit scrutiny," says Denise James, who co-authored the report.
Where Fraud Is the Most Prevalent
The states with the highest incidence of mortgage fraud are:
Florida (which also led the nation in 2009)
New York
California
New Jersey
Maryland
Michigan
Virginia
Ohio
Colorado
Illinois
Source: “Reports of Mortgage Fraud Reach Record Level,” The Wall Street Journal (May 10, 2011) and “Reported Cases of Mortgage Fraud Down, But Actual Fraud Still on Rise, Experts Say,” Associated Press (May 9, 2011) Copyright National Association of REALTORS®. Reprinted with permission.
Suspected mortgage fraud activity increased nearly 5 percent to 70,472 “suspicious activity reports,” according to the Financial Crimes Enforcement Network. That’s up from 67,507 in 2009 (and a dramatic increase when compared to 37,000 mortgage fraud reports in 2006 during the housing boom). The agency estimates more than $1.5 billion in losses from mortgage fraud in 2010.
Mortgage fraud reports include everything from borrowers falsifying information on loan documents, fraudulent appraisals, to elaborate schemes that target home owners underwater on their mortgage.
Reports of suspected mortgage fraud have continued to rise since the housing boom.
However, while the number of reports of mortgage fraud continues to rise, the number of fraud cases have actually decreased, the LexisNexis Mortgage Asset Research Institute reports. Mortgage fraud cases dropped 41 percent between 2009 and 2010, the biggest drop since the institute began to track reports. The drop was attributed to a decrease in home loans from banks tightened lending standards.
"We've got lower originations, less loan volume, less attention being paid to in terms of what's happening to those loans, and tighter credit scrutiny," says Denise James, who co-authored the report.
Where Fraud Is the Most Prevalent
The states with the highest incidence of mortgage fraud are:
Florida (which also led the nation in 2009)
New York
California
New Jersey
Maryland
Michigan
Virginia
Ohio
Colorado
Illinois
Source: “Reports of Mortgage Fraud Reach Record Level,” The Wall Street Journal (May 10, 2011) and “Reported Cases of Mortgage Fraud Down, But Actual Fraud Still on Rise, Experts Say,” Associated Press (May 9, 2011) Copyright National Association of REALTORS®. Reprinted with permission.
Wednesday, May 4, 2011
Feds Sue Deutsche Bank, Alleging Mortgage Fraud
THE ASSOCIATED PRESS May 3, 2011
NEW YORK
The federal government has sued Deutsche (DOY'-chuh) Bank. It alleges the bank committed mortgage fraud by repeatedly lying so that it could join a government program that insured mortgages.
The Manhattan lawsuit seeks to recover some of the hundreds of millions of dollars in insurance claims that the government has had to pay when homeowners defaulted on their mortgages. The lawsuit also asked for punitive damages.
According to the lawsuit, Deutsche Bank profited from the resale of the government-insured mortgages.
The government says Deutsche Bank recklessly selected mortgages that violated the rules of the program. It says the bank ignored whether borrowers could afford their mortgage payments.
Deutsche Bank says in a statement that it will fight the lawsuit. It calls the allegations "unreasonable and unfair."
NEW YORK
The federal government has sued Deutsche (DOY'-chuh) Bank. It alleges the bank committed mortgage fraud by repeatedly lying so that it could join a government program that insured mortgages.
The Manhattan lawsuit seeks to recover some of the hundreds of millions of dollars in insurance claims that the government has had to pay when homeowners defaulted on their mortgages. The lawsuit also asked for punitive damages.
According to the lawsuit, Deutsche Bank profited from the resale of the government-insured mortgages.
The government says Deutsche Bank recklessly selected mortgages that violated the rules of the program. It says the bank ignored whether borrowers could afford their mortgage payments.
Deutsche Bank says in a statement that it will fight the lawsuit. It calls the allegations "unreasonable and unfair."
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