Fraud News Archives 2005

Revised Appraisal Forms Performing Well
New residential appraisal forms are making it easier to detect mortgage fraud.

LO Steals Down Payment
Bruce and Martha Miles thought they were putting down $53,000 with a North Carolina mortgage loan officer to buy a new house.

Chase Still Battling Poconos Homeowners
A settlement between Chase Manhattan Mortgage Corp. and borrowers who say they were duped into buying overpriced homes in the Poconos may be on the rocks.

Citigroup Unit Stung by Chicago Gangs
When financial services giant Citigroup purchased Associates First Capital Corp. in 2000, it got more than one of the nation’s largest subprime lenders.

Recent Fraud Losses Over $1/2 Billion
Losses to the mortgage industry have recently totaled more than $600 million, according to a new government report.

Broker Growth Fuels Georgia Fraud
No place has been hit harder by the rash of mortgage fraud sweeping the nation than Georgia.

5 Common Broker Schemes
In an analysis of proposed mortgage broker licensing, Colorado regulators have outlined five common schemes used by unscrupulous brokers on unsuspecting borrowers.

Broker Facing Unrelated Criminal, Civil Actions
A mortgage broker already facing charges of ripping off the family of a 9/11 terrorist attack victim has been sued for allegedly stealing a New York woman’s home.

FTC Touts Actions Against Mortgage Companies
Several mortgage companies that have either violated privacy rules, preyed on Hispanics or illegally contacted consumers this past year have had to settle charges with the Federal Trade Commission.

Broker, 4 Processors Indicted
A federal grand jury in Louisiana has returned a 65-count indictment against an alleged mortgage fraud ring that included a mortgage broker, four loan processors and an appraiser. The bad deals were submitted to a now-defunct subprime subsidiary of Bank of America.

Mortgage Industry Can Do More to Prevent Fraud
Dallas — Mortgage bankers meeting in Texas for an educational conference were joined by the FBI in a discussion about mortgage fraud and how to prevent it.

Appraisal Alterations Lead to License Suspension
Kansas state banking officials recently ordered the revocation of a Missouri-based mortgage company’s license and a $235,000 fine for alleged fraudulent loan activity.

NetBank Delays Financials
NetBank Inc. warned investors it would delay issuing financials because of $13 million in conforming mortgage loans with irregularities.

FED Suspends Loan Officer
The Federal Reserve Board recently suspended a loan officer who was charged with fraud committed while working at another bank.

100+ FBI Agents Arrest Originators, Others
Federal prosecutors in Detroit have charged 20 people in an alleged $10 million mortgage fraud ring that was under investigation for more than two years.

Lawsuit Alleges Fraud at Berkshire Mortgage Sub
A messy lawsuit against a Berkshire Hathaway mortgage subsidiary alleging investors were misled about the nature of their investments may be close to settlement.

Behavioral Fraud
A California company helps lenders prevent mortgage fraud with a technology that has reportedly reduced credit card fraud significantly.

Criminal Charges Filed in Massive Northwest Fraud Case
The comptroller of a once “high-flying” mortgage firm in Washington state that went under in a spectacular financial flame out is facing criminal charges and is among a group of former executives being sued by the federal government.

Fraud Mitigation
While there is no shortage of mortgage fraud, there are plenty of mortgage fraud prevention products.

Ring of Fire
Three more indictments have been handed down in property flipping case involving a wide ranging ring, including several mortgage brokers, and costing lenders more than $16 million in Massachusetts.

Casino Tip Leads to Broker Bust
A Colorado mortgage broker and three of his loan officers have been indicted in an alleged large scale mortgage fraud scheme that involves more than $20 million in loans and 117 homes.

NJ Builder Operating Ponzi Scheme
A New Jersey homebuilder is charged with deceiving investors and inflating values on properties it mortgaged.

Broker Busted at Closing for Stolen ID, Fraud Loans
A Florida mortgage broker had just cut a deal at a Broward County title company that netted her $178,000.

Nonowner Occupied Fraud
During the first half of the year, mortgage fraud schemes have been dominated by borrowers falsely claiming they will occupy a property being financed, according to data released by a mortgage fraud insurance provider.

Mortgage Insiders Accused in Brooklyn Fraud Case
A loan originator and his assistant are accused of helping a former high school football star execute what could wind up being one of the biggest mortgage fraud schemes ever in Brooklyn, N.Y.

Only Jail Can Keep Convicted Broker From Originating
Cleburne Brigham keeps doing mortgage deals.

TV News IDs Players in Active Fraud Scam
A local TV news station has identified two key players in a series of transactions involving overpriced properties in an affluent Oklahoma City neighborhood.

Fraud Case, Congressional Campaign Related
John Myers and Adam Taff seemed exactly like the type of mortgage professionals that would appeal to most consumers.

Brokers Used Elderly in Fraud Scheme
A group of Mississippi mortgage brokers is facing prison sentences of several hundred years and millions of dollars in fines if convicted of running a scam that targeted elderly homeowners.

13 Indicted in Georgia Case
Mortgage players from several companies were caught up in a criminal fraud ring responsible for what has been called the largest mortgage fraud case ever in one Georgia community.

Bin Laden Contact Charged with Loan Fraud
A Virginia man believed to have provided communications equipment to Osama bin Laden has been indicted on mortgage loan fraud.

Unpaid Net Branch Employees Deny Fraud Accusations
A group of Tampa, Fla., workers twice recently have picketed outside the headquarters of a Clearwater mortgage financing company, saying they haven’t been paid for about two months of work. But the company says its reputation is being unfairly smeared.

Mortgage Educator Condemns Financial Planner Alliances
Financial planners disregard the suitability of getting a home loan to make investments, according to a mortgage educator — who says tag team arrangements with loan originators “leads to a growing opportunity for fraud.”

Broker Pleads Guilty
The owner of an Illinois brokerage firm potentially faces up to 50 years in prison after pleading guilty to her role in a $10 million fraud scheme.

Former Executives of Failed Firm Going to Jail
In an abrupt about face, one of the former leaders of a failed South Carolina subprime lender has pleaded guilty to charges she deceived thousands of investors and now faces a long prison term.

Regulator Mandates GSE Fraud Reporting
Reporting mortgage fraud will become mandatory at Fannie Mae and Freddie Mac.

Hispanics Targeted in Fraud Scheme
Two Pennsylvania men, a mortgage broker and a real estate agent, are going to federal prison for running a predatory lending scam that targeted poor Hispanic immigrants.

Broker Faces Prison Again
With a prison record because of mortgage fraud, a California man is accused of using a stolen identification to illegally broker loans.

Fraud Climbing in SC, Midwest
South Carolina is fast becoming one of the states with the most mortgage fraud. And while many of states already known for fraud still place at or near the top, some new players emerge when fraud on just subprime lending is analyzed.

Service Subdues Exaggerated Income
A California risk management services provider claims a new automated online service reduces fraud from fake income verifications.

Processor Stole, Used Applicants’ IDs
Because of what they do, mortgage loan processors have access to a lot of personal information — names, birthdates, Social Security numbers and more.

Unlicensed CA Broker Steals Loan Proceeds
A California mortgage broker is accused of originating loans for World Savings Bank without a license — then keeping borrowers’ loan proceeds for himself.

Meltdown for Jumbo Fraud Suspect
A New Jersey woman arrested for her part in a jumbo mortgage fraud scheme threatened FBI agents with a butter knife as they arrested her, then rambled during a federal court appearance.

Ponzi Suspect Shoots Self
With his subprime mortgage company in disarray, millions of his investors’ dollars missing and a pending investigation by state regulators, Robert Kurland must have felt there was no way out.

More ID Theft Prevention = Less Mortgage Fraud
Stolen identities can enable criminals to commit mortgage fraud. And despite the continued escalation of identity theft — it can be prevented.

Scam Diverted Millions in Hedge Funds to Mortgage Co. Fronts
Being denied a mortgage license didn’t stop a mother and her son, who claim to be descendants of Turkish royalty, from operating several Connecticut mortgage companies with allegedly millions of dollars in cash flow.

Mortgage Fraud Analysis: Part III
Few would dispute that mortgage fraud has been a growing problem. In this third of a three-part series, MortgageDaily.com looks at the prevention of fraud.

Rising Property Values Factor in Fraud
Residential mortgage fraud continues to plague the industry, according to a report from the Mortgage Asset Research Institute, but much of it is not being reported. And recently made subprime loans with serious defaults, which usually involve some sort of misrepresentation, are raising flags in states not traditionally known for high rates of fraud.

Ameriquest AEs Plead Guilty to Fraud
It sounded like an investment that couldn’t lose.

MI Co Uses AU to Prevent Fraud
A mortgage insurance company has jumped into the fraud prevention business — using its automated underwriting system to flag loans at origination. The new service is one of many available to help mortgage bankers stem the growing tide of fraud.

Mortgage Fraud Analysis: Part II
Mortgage fraud continues to grow, according to the latest FBI statistics, and usually involves an industry insider. In this second part of an exclusive three-part series, the different types of fraud and the players are examined.

Mortgage Fraud Analysis: Part I
MortgageDaily.com has recently completed an analysis of government statistics, industry reports and material on hundreds of mortgage fraud cases. In this first of a three-part series, statistics and estimates of fraud are discussed.

FTC Focuses on Hispanic-Targeted Fraud
The federal government has teamed up with state governments to do more to prevent mortgage fraud, among other scams, targeted at Hispanics.

Fraud By State
Rapid home appreciation may be masking fraud in some markets, but not in the Sooner State.

Plethora of Fraud Prevention Tools
As the discovery of mortgage crimes continues to escalate, several companies have responded with services intended to mitigate fraud damages.

Mortgage Employee Steals $1.5 Million From Employer
An employee in the mortgage department of a Chicago insurance company was able to dupe her employer for five years.

FBI Wants Brokers’ Help with Fraud
The Federal Bureau of Investigation wants mortgage brokers to do more to prevent fraud.

Georgia Stiffens Mortgage Fraud Penalties
The state with the most mortgage fraud is doing something about it.

InterFirst Insider Aided Brokers in Fraud
Falsifying loan applications will cost a 24-year-old mortgage company worker from Michigan nearly $1 million and the next two years of her life.

Stemming Fraud Losses
Borrowers can opt to receive a fraud alert when suspicious activity occurs with their credit files. The service, along with others catering to lenders, aims to curb losses caused by mortgage criminals.

Florida Official Tied to Broker Fraud Case
Fort Lauderdale’s top code enforcement official has been suspended from her job for her possible role in a federal mortgage fraud investigation.

Bank Exec Sentenced after Decade of Stealing
Federal prosecutors never found a good reason why former Wilmington Trust Company executive John W. Flowers stole nearly $1.4 million from the Delaware-based company over a period spanning more than a decade.

Internet is Fraudster’s Best Friend
Catch Me If You Can subject Frank Abagnale knows about fraud. As a young man he perpetrated a book’s worth of the most ingenuous “white collar” crimes imaginable against corporations, law firms and the federal government.

Pastor Indicted for Fraud
Three Massachusetts mortgage brokers have been arrested for mortgage fraud. But what makes this case interesting is that one of the brokers is pastor at his local Baptist church.

Originators Blamed for Appraisal Fraud
Mortgage loan originators and real estate agents are responsible for appraisal fraud — and resulting foreclosures, according to a recent report by a public policy group.

Ameriquest Employees Accused of Fraud
Loans made to two Tampa, Fla. women show former Ameriquest employees may have manipulated investment account statements, the Los Angeles Times reported.

Fugitive Woman Arrested in Canada
A former mortgage broker accused of participating in a $20 million Atlanta fraud scheme was recently arrested in Canada and is on her way back to the United States to face charges.

Option One to Increase Policing of Brokers
Pennsylvania investigators have traced significant mortgage fraud to loans originated by Option One Mortgage Corp. brokers — leading the lender to enter into a joint agreement with the government promising it will more closely watch its brokers.

Mortgage Bankers, Allies Plan Attack Against Fraud
Mortgage bankers converged in Washington, D.C., last week to discuss the growing threat of fraud in the industry and strategize about how to combat it.

InterFirst Sues Indiana Broker for $5.5 Million in Bad Loans
ABN AMRO Mortgage Group claims in a federal lawsuit it is the victim of a large scale fraud perpetrated by a mortgage broker, appraisers and a title company among others.

Fannie, Freddie and Fraud
The government seeks to make it a crime to present fraudulent information on loans purchased by Fannie Mae and Freddie Mac. The move, along with a recommendation that the two secondary mortgage giants be required to promptly report possible fraud, was the result of Fannie’s failure to pass on information about fraud loans Ginnie Mae previously purchased.

Broker Kept Proceeds from Cashout Loans
A Los Angeles-area mortgage brokerage is accused of defrauding lenders out of more than $9 million and trying to launder the money through offshore accounts, according to a 14-count indictment returned by a federal grand jury.

Chicagoland Foreclosures Fueled by Fraud
Mortgage fraud has played a big role in the high level of Chicago-area foreclosures.

Imprisoned Originator Gets More Time
A Maryland mortgage broker already in prison for stealing from clients is in trouble again for collecting refinance fees up front on loans where he had no chance of delivering the deals he promised.

Prison Time Growing for Fraud Criminals
The government reports that the number of people who went to jail for mortgage fraud last year was at a three year high, and a healthy real estate market is only drawing more scrutiny to these crimes.

Fannie, Freddie Forced to Fight Fraud
The reins have once again been tightened at Fannie Mae and Freddie Mac, this time with their regulator proposing that the two companies be required to report fraud.

Mortgage Investors Out $20 Million
Following the death of her husband, Gloria Morrison had the painstaking task of sorting through the financial details of the mortgage company he founded. But what she found led her to send the company into receivership.

3000 FTC Complaints of ID Theft Used for Mortgages in ’04
Lenders beware: The borrowers you think you’re lending to may not be who they say they are.

Fraud Funded Lavish Lifestyle
New Jersey authorities are trying to bust up a massive mortgage securities fraud ring accused of bilking more than 100 investors out of $42 million.

Fake Co. Formed to Collect Mortgage Payoffs
A businessman accused of forming a fake mortgage company in Texas to collect payoffs pled guilty to mail fraud and money laundering — crimes that could jail him for up to 40 years.

Fraud Felon Helps Forestall Forgery
A major mortgage company service provider has partnered with a convicted felon.

Ohio Fraud Network Costs Lenders $10 Million
Federal prosecutors in Ohio have received guilty pleas from two more participants in a mortgage fraud ring that cost lenders more than $10 million.

From Riches to Rags
A California mortgage broker who contributed $1 million to buy naming rights at a college sports complex and pledged money for a cancer center is now sitting in a jail cell facing charges in a multimillion dollar fraud scheme. Also accused in the case is a former escrow officer of a major title insurance company.