HUD Releases Revised Regulation
More than a year ago, a rule was proposed that would impact mortgagees on loans that are insured by the Federal Housing Administration. Among issues addressed by the proposed rule were indemnification requirements and mortgagee termination. A final rule addresses some of the concerns that have since been raised including indemnification on loans with mortgage fraud.

Back in October 2010, the Department of Housing and Urban Development proposed a rule that would have lenders on government-insured mortgages facing tougher underwriting requirements and changes to the termination process.

HUD sought to increase its authority to hold mortgagees liable for insurance claims paid on loans that don't meet its guidelines.
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WMC Probe Focuses on Fraud
Federal authorities have launched an investigation into defunct subprime lender WMC Mortgage Corp. to determine whether senior managers condoned mortgage fraud, sources said.

Feds, States Stomp Out Foreclosure Rescue Services
Federal regulators are going all out to put a halt to firms that collect hefty fees while their clients still lose their homes. States including California, Florida and Illinois have also been busy eradicating companies that collect up-front fees in return for promises that foreclosures will be halted. Many of the schemes purport to provide an investor who will buy a distressed homeowner's property then instead use straw buyers and mortgage fraud to strip the equity.

Appraiser Used IDs of Other Appraisers
An Ohio appraiser will spend four years in prison over admittedly using the identities of other appraisers on inflated reports.

Mortgage Firm, Biggest Realtor Team Sued Over HELOCs
A lawsuit filed against a real estate team that has been ranked as the biggest in the country alleges that Maryland homebuyers were convinced to purchase another home before selling their current residences -- a scheme that allegedly generated more commissions in the process. Lawyers in the case seek class action certification.

California Claims No. 1 Mortgage Fraud Ranking Activity climbed on cases being prosecuted in California for mortgage fraud, leaving the state with more mortgage fraud than any other. New York also saw acceleration, while Florida's mortgage fraud index topped the list and Minnesota remained prominently perched among the five-worst locales. But as a whole, the country's case activity was slower.

Former Countrywide Exec Says Some Senior Execs Committed Crimes A former executive vice president at Countrywide Financial Corp. was fired, she claims, before she had a chance to talk at a planned meeting with government regulators about mortgage fraud at the company and the senior executives who condoned it. She was recently awarded nearly $1 million.

Appraisal Fraud Down as Income Fraud Surges
While the overall risk of fraud has changed little and appraisal fraud risk has fallen, a dangerous spike was noted in the risk of borrowers lying about their income or jobs. Among the 10 metropolitan areas at the greatest risk of mortgage fraud, most are ranked among the areas with the 10-highest foreclosure rates. Some metropolitan areas in the Northeast have seen a significant increase in the risk of identity and occupancy fraud.

Mortgage Crimes Ledger
Defendants in a range of mortgage-related criminal cases are being indicted, tried and sentenced at a breakneck pace. Alleged crimes include embezzlement, secondary fraud and mortgage fraud. In addition to borrowers, those being deceived include auditors, regulators and investors. Several cases involve failed banks.

$12 Billion in 2010 Fraudulent Originations
Last year, $12 billion in fraudulent mortgage loans were originated, according to a new report. Compared to 2010, the rate of fraud this year is expected to be mostly flat. But there has been a shift from identity theft to fraud committed on distressed sales. Government mortgages have been found to carry more risk than their conventional counterparts.