U.S. prosecutors have announced a massive crackdown on mortgage fraud
that has resulted in losses of about $1 bilion around the country. In
Miami, VOA's Brian Wagner reports the schemes have worsened the
problems facing the real estate and banking industries.
Federal
officials say more than 400 people are facing charges in the mortgage
fraud probe, including 60 people arrested Wednesday during sweeps in
several major cities. Many of the accused were employed in the real
estate industry, as mortgage brokers, property appraisers or title
agents, and some worked at banks issuing loans. Officials say those
individuals abused their positions to inflate a property's value or
pass along false information about a buyer or a home to claim the
mortgage.
In Miami alone, officials say 102 people have been
charged since last September. U.S. Attorney for south Florida, Alex
Acosta, says some schemes involved people using stolen identities, for
example, to get a mortgage on a home worth $100,000.
"They will
then flip [sell the house] that to a second stolen identity for
200,000[dollars], and flip it to a third stolen identity and sell it
for 300,000. In essence, they are inflating the price year after year,
so they walk away with 300,000 for a house they paid 100,000 for," said
Alex Acosta.
Officials some of those charged in the probe belong
to criminal organizations that were using the schemes to launder money
raised through illegal activities.
FBI Assistant Special Agent
Tim Delaney said the majority of cases involved the cooperation of
several people tied to the real estate and mortgage industries, with
the simple goal of making money.
"These are the frauds that the
FBI is most interested in putting our resources to, because they
inflate the housing market prices when it is not warranted," said Tim
Delaney. "In many of the cases we have seen, no one ever even lived in
the house."
Officials say the fraud operations have a damaging
effect on Miami and other communities, because they create artificially
high homes values and often lead to foreclosures. They say additional
arrests are expected as officials continue to uncover bogus mortgages.
In
a separate action, authorities in New York arrested two former managers
of Bear Stearns investment bank for concealing problems in some of the
firm's sub-prime mortgage holdings. The men are accused of fraud in
managing hedge funds that collapsed last year, months before the firm
said it had lost billions of dollars in investor's money. The bank's
problems helped spark the sub-prime mortgage market crisis.
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