Crackdown on housing scams

Treasury chief Geithner leads effort to stop foreclosure and mortgage fraud as Feds worry that mortgage rescue will bring out bad guys. FBI: 2,100 open cases.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Jennifer Liberto, CNNMoney.com senior writer

holder_090406.03.jpg
Attorney General Eric Holder says FBI is probing 2,100 cases of mortgage fraud.
Map
Where does your state rank?
Americans everywhere are feeling the recession's pain some more than others.

NEW YORK (CNNMoney.com) -- In the wake of an Obama administration program to rescue troubled homeowners, several federal agencies are teaming up to fight mortgage and foreclosure scams, Treasury Secretary Tim Geithner said Monday.

The administration's $75 billion effort to help as many as 9 million mortgage holders get new or refinanced loans is drawing a lot of interest from homeowners, Treasury Department officials explained.

"Those who would seek to prey on the most vulnerable also seek to intensify their efforts as well," Treasury Secretary Tim Geithner said. "We will aggressively pursue those involved in mortgage rescue scams."

Treasury, the Department of Justice, the Federal Trade Commission and the Department of Housing and Urban Development will lead the effort from Washington. State attorneys general will also participate.

The Treasury's financial crimes investigative unit is sending financial institutions a checklist to help them spot suspicious loan activity and foreclosure rescue scams.

Meanwhile, the Federal Trade Commission reviewed online and print advertising for mortgage foreclosure companies nationwide and found "71 distinct companies running suspicious ads," Treasury said.

The FTC has filed five civil cases against companies offering loan modification or foreclosure services, including one against a company that spent $9 million on TV and radio ads in less than a year.

"These companies are kicking people when they're down, charging enormous upfront fees and sabotaging homeowners who could be getting help for free," said FTC Chairman Jon Leibowitz. "These companies are giving people false hope. They are shameless, as well as opportunistic."

The initiative will bring more resources for the FBI and the Justice Department to investigate and prosecute mortgage fraud, Housing Secretary Shaun Donovan told a congressional panel last week.

The announcement is timely. Mortgage fraud has reached an all-time high even as the number of home loans being issued has shrunk, according to a report issued last month by the Mortgage Asset Research Institute and the Mortgage Bankers Association.

The FBI is investigating more than 2,100 mortgage fraud cases, up almost 400% from five years ago, Attorney General Eric Holder said. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
15 top executives with $1 salaries Some CEOs and founders agree to salaries of just $1 a year. But once goodies like bonuses and stock options are added in, some of those executives end up taking home many millions of dollars a year. More
Mercedes SL65 AMG: 621 horses of topless power Turn heads as you blow by traffic in this roadster convertible from Mercedes. More
Where the middle class is most unequal CNNMoney looks at the five states with the biggest differences in middle class incomes. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.