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Loan fraud task force created

By Marcie Geffner · Bankrate.com
Tuesday, May 24, 2011
Posted: 12 pm ET

Victims of mortgage scams have a new cop on the beat in California.

The U.S. Department of Justice and California Attorney General's office have teamed up to create a joint mortgage fraud task force of 25 attorneys and investigators who will monitor, investigate and prosecute both civil and criminal mortgage-related scams and frauds in the state.

Targeted scams will include:

  • Predatory lending.
  • Unfair business practices in originating loans.
  • Deceptive loan marketing.
  • Loan modification and foreclosure consultant scams.
  • Fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief.
  • Misconduct involving investments and securities tied to subprime mortgages.
  • False or fraudulent claims made to the state with respect to mortgage-backed securities.

California Attorney General Kamala D. Harris said in a statement that the task force will work to safeguard homeowners at every step of the loan process from origination to securitization.

"We are setting a high bar for other states, and we insist that homeowners be protected, respected and informed," she said.

California has been hit hard by not only the foreclosure crisis, but also predators who've victimized people who are underwater on their mortgages, in foreclosure or at risk of foreclosure.

Last year, nearly 546,700 homes in the state were the subject of one or more foreclosure filings, and a total of 2 million homes are projected to enter the foreclosure process between 2009 and 2012. The state Department of Justice has received thousands of complaints related to foreclosure scams, mortgage fraud and mortgage servicing practices, according to the statement announcing the task force.

California homeowners who believe they've been scammed can file a complaint online through the state Attorney General's office.

Follow me on Twitter: @marciegeff

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