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Nov. 25, 2009
Copyright © Las Vegas Review-Journal

Mortgage fraud crackdown planned

By VALERIE MILLER
LAS VEGAS BUSINESS PRESS

State and federal officials are joining forces to combat rampant mortgage relief scams, federal and state officials announced Tuesday.

The offensive against fraudulent foreclosure-prevention and mortgage-modification companies, named "Operation Stolen Hope," was announced by Senate Majority Leader Harry Reid, Federal Trade Commission Chairman Jon Leibowitz and Nevada Attorney General Catherine Cortez Masto in Las Vegas.

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    • "No state has felt the full force of the foreclosure crisis like Nevada has," Reid said. "As foreclosures rise, so do the instances of fraud."

    Mortgage modification companies have proliferated to the point that the state doesn't have the manpower to police all of them without the support of federal agencies, Cortez Masto said. She praised Reid's efforts to bring national attention to the problem of fraud in the industry.

    Fraudulent mortgage and foreclosure operations are not just small-time criminal operations anymore, Cortez Masto said.

    Some mortgage scammers have offshore bank accounts, fake IDs and false Social Security cards. Other criminal activities have been tied to some of the same groups, including child prostitution.

    "At least one individual was on the United Kingdom's top Mafia 10 most-wanted list," the state attorney general added.

    Attorneys general from about 25 states are taking part in the enforcement effort.

    Nevada has indicted nine allegedly fraudulent mortgage companies in the last 60 to 90 days. Seven civil complaints have also been filed by the state attorney general's office, Cortez Masto said.

    More criminal mortgage fraud prosecutions are likely, with 154 consumer complaints already filed by Nevadans. The majority of the fraudulent operators are unlicensed and have no real estate or brokers' credentials, she said.

    The FTC is planning to issue new rules for foreclosure relief and mortgage modification companies in the next 30 days "to protect homeowners," Leibowitz said.

    The commission may opt to pass rules forbidding businesses to take up-front fees from borrowers.

    Typically, the hallmark for mortgage modification scams is a request for up-front payment, Leibowitz said.

    Contact reporter Valerie Miller at vmiller @lvbusinesspress.com or 702-387-5286.

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    JUCO FB Man wrote on November 25, 2009 09:19 PM: My, my, my... Scary Harry is going to save us from ourselves again. After he and his political buds and ilk created the problem in the first place...

    Last I checked, the state passed laws that you need to be licensed to do loan mods. Now you want a company to work for free and not get paid?

    How about you put that same BS restriction on lawyers? They don't win, they don't get paid...


    Good wrote on November 25, 2009 06:05 PM: Fraud. You mean to tell ME that all of my neighbors who did not qualify for a loan... where (gulp!) given a loan anyway... and did not pay their association dues... and did not pay their insurance or diddle-squat? And now BO expects me to pay my share and their share? Well I'll email Harry and thank him for taxing me more and more for people who never intended to pay diddle... and now our city is Blacklisted. Good Move-O Searchlight Reid.


    Habib wrote on November 25, 2009 05:23 PM: Capital punishment is the only way to put a stop to this madness that is desrtoying the country.


    Ugly American wrote on November 25, 2009 01:08 PM: It was in the RJ weeks ago that Nevada State Law Enforcement and Metro knew that 158 mortgage refinance companies were active in the Las Vegas area but only a handful of them were licensed and of those only a few were fully bonded as required by law.

    Despite the fact that there is well documented ongoing fraud and illegal activity in the millions of dollars by known businesses with known addresses Metro instead chooses to focus on questions like are people getting lap dances that are 'too close?' and do UNLV students drink beer?

    Seriously, can we check our priorities before we end up like Pembroke Illinois? That's the town where unemployment reached 46% and they stopped paying the police.

    http://cbs2chicago.com/local/pembroke.illinois.poorest.2.1307100.html


    jaded wrote on November 25, 2009 11:37 AM: Gee what's the rush?????


    d wrote on November 25, 2009 10:28 AM: So where is this list of 9 companies?
    Shouldn't people be warned?


    roger wrote on November 25, 2009 10:19 AM: As far as I am concerned the fraud started when the bubble started. Again I say, follow the money trail, see who made a ton of money as prices went thru the roof and start there. Those were the people who realized they could flip houses, create a false sense of demand, and then qualify a bogus loan appl for an unqualified purchaser at top dollar. Reid should have figured something was afoul years ago when property values skyrocketed..I mean come on...


    Joe Bama wrote on November 25, 2009 10:03 AM: Well at least they finally got around to curbing the rampant fraud and abuse in the buggy whip industry.


    time-to-wake wrote on November 25, 2009 09:44 AM: This is a dollar short and a day late. The housing bust has come and come... and NOW you want to crack down? Oh, that's right, you were asleep at the regulatory switch before and just woke up!


    HELEN WEILS wrote on November 25, 2009 09:33 AM: YEAH, HAPLESS HARRY. ANOTHER BUREAUCRATIC BOONDOGGLE.

    ANYBODY BUT REID!!!


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