Mortgage Crimes Prosecuted
Many mortgage-related crimes are committed by people who don't necessarily work for a mortgage lender -- though it is often the mortgage firm that takes the hit. Defendants include attorneys, investment bankers and real estate investors.
In a guilty plea announced on April 12 by Preet Bharara, U.S. Attorney for the Southern District of New York, defendant Kareem Serageldin admitted that he fraudulently inflated the prices of bonds backed by subprime residential mortgage-backed securities and commercial MBS in Credit Suisse's trading book in late 2007 and early 2008. The scheme earned him $6.9 million in extra pay during 2007.
Serageldin, who worked as a managing director/global head of structured credit at Credit Suisse Group's investment banking division, was extradited from the United Kingdom.
More Bank Executives Headed to Prison
Whoever said that nobody has gone to jail for causing the financial crisis hasn't been following the numerous criminal cases against former executives of failed banks. Defendants are accused of a range of crimes including mortgage fraud, embezzlement and accounting fraud.
Mortgage Fraud SARs Filings Fall
The number of reports filed by banks and credit unions that suspect mortgage fraud slid more than a quarter last year. Also lower were the number of instances involving appraisal insiders.
Wholesaler Wins Appeal in Mortgage Fraud Case
A California appeals court has ruled in favor of a wholesale lender that was a victim of mortgage fraud. At issue was the settlement agent's failure to advise the lender of an unauthorized disbursement.
Mixed Outlook for Ability to Repay Rule
While the ability-to-repay rule will eliminate risky loans that were so prominent during the housing boom, the rule could keep even more consumers from qualifying for mortgages.
Decline in Possible Mortgage Fraud
The possibility of mortgage fraud on new loan originations took a turn for the better. But several metropolitan areas including San Francisco experienced deterioration.
Mortgage Servicers Frequently Victims of Crime
|Mortgage Fraud Case Activity Slows
The holidays took a toll on mortgage fraud prosecutions, as the fourth-quarter 2012 Mortgage Fraud Index sank to its lowest level in nearly five years. However, the drop appears to have only been temporary. California saw a big improvement, while the dollar volume in Florida spiked.
Thanks to a chaotic distressed loan marketplace, criminals are seizing opportunities to deceive mortgage servicers and line their own pockets. Servicers are being misled about the condition, maintenance and sale of distressed assets. Other recently active mortgage-related criminal cases include a mortgage broker who collected illegal up-front fees, a subprime lending employee who used mortgage fraud to increase his commissions and a registered broker-dealer who misled buyers and sellers of residential mortgage-backed securities.
Borrowers Duped by Promises of Debt Reduction
The promise of debt reduction lures in unsuspecting borrowers who fork over thousands of dollars in up-front fees to criminals that never deliver lower or eliminated loan balances. In some cases, defendants take the scheme to the next level by using mortgage fraud to strip equity from the properties involved.
Credit Unions Prominent in Bank Crimes
Federal and state prosecutors are prosecuting a host of alleged crimes by employees and executives of financial institutions that include of mortgage fraud, bribery and embezzlement. While customer accounts are often the target of the crimes, it's the banks that take the hit. Credit unions figure prominently into the latest spate of criminal activity.