Minneapolis, MN (PRWEB) June 19, 2012
The Federal Housing Finance Agency (FHA) announced an initiative yesterday to complement current fraud reporting and to determine whether an individual or company should be suspended from doing business with Fannie Mae, Freddie Mac or the Federal Home Loan Banks to ensure that regulated entities are not exposed to unnecessary risks.
Following the National Mortgage Settlement, and called the Suspended Counterparty Program, it "will require Fannie Mae, Freddie Mac and the Federal Home Loan Banks to notify FHFA whenever an individual or company with whom they do business is adjudicated to have engaged in fraud or other financial misconduct.” See attachment.
Fannie May released a document titled, “Fraud Finding Statistics,' based on Fannie Mae loan reviews completed through the end of April 2012. The top ten states by geography are, respectively, California, Texas, Illinois, New Your, Colorado, North Carolina, Florida, New Jersey, Georgia and Washington.
Just released on June 12, by the Chicago Tribune, “Francisco Rodriguez, 41, was indicted Monday on two counts of wire fraud after an investigation by the FBI and Indiana State Police. The indictment accuses Rodriguez of presenting false financial information when he applied for mortgages for two Gary homes in summer 2007.”
Ann Fulmer, a lawyer and mortgage fraud expert who co-authors the quarterly Interthinx Mortgage Fraud Risk Report, says, “There have been a number of federal cases recently where people have been convicted of bid rigging (at foreclosure auctions). The lack of data integrity probably cost lenders about $2 trillion so far because of REOs, short sales, foreclosure sales. The federal government has given another $3 trillion in direct aid to banks in trying to stabilize the market with foreclosure prevention and alternative programs. U.S. taxpayers lost about $8 trillion in equity (due to declining property values). That’s all added up about $12 trillion or $13 trillion.”
Homeowners can recall the Senate Banking Hearing on Feb. 28, 2012 and the discussion on protecting taxpayer dollars in the midst of housing recovery efforts. Senator Toomey and Edward DeMarco, the acting director of the Federal Housing Finance Agency confirmed the following: “Today, FHFA is balancing three responsibilities: preserve and conserve assets, ensure market stability and liquidity, and prepare Fannie Mae and Freddie Mac for an uncertain future. While the long-term course of housing finance is being debated and ultimately determined, FHFA meets these responsibilities by overseeing these companies’ management of, and limiting cost to taxpayers from, their $5 trillion position in the market.” Jenna Thuening, owner of Home Destination, finds the costs of mortgage fraud are staggering and protections are welcome.
In January of this year, Michigan approved a new law making mortgage fraud a felony. A person who commits residential mortgage fraud is guilty of a felony punishable by imprisonment for up to 15 years, a maximum fine of $100,000, or both. If the loan value stated on documents used in the mortgage lending process exceeds $100,000, however, the penalty is up to 20 years' imprisonment, a maximum fine of $500,000, or both.
The FBI defines mortgage fraud as a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan. Mortgage fraud schemes can take many forms, such as loan origination schemes, illegal property flipping, foreclosure rescue scams, and short sale schemes, which evolve as market conditions change. Fannie Mae says, “Affinity fraud is the term used for fraud schemes that prey upon or recruit people of similar persuasion.”
Home Destination encourages homeowners seeking protection from mortgage scams to read through Fannie Mae’s instructional presentation called Mortgage Fraud: Affinity Frauds. Common fraud tactics include “the use of straw buyers, falsified gift funds, and altered employment or asset documentation. A straw buyer is typically a fictitious individual or person needing money to the extent that they would take on the risk of selling their identity.“
Home Destination, a Certified Distressed Property Expect, helps buyers and homeowners seeking a loan modification. avoid potential fraudulent processes.