Losses of more than $1 billion from 73,000 victims across the U.S. Two hundred businesses shut down. Charges filed against 530 people.
These are some of the results of the Distressed Homeowner Initiative recently released by the Department of Justice, the FBI, the Department of Housing and Urban Development and the Federal Trade Commission. The FBI launched the initiative last October to protect homeowners from fraud schemes and raise awareness about them.
During the press conference where the results were released, Associate Deputy Director Kevin Perkins said, “In contrast with previous initiatives, where the fraud victims primarily were lenders, the focus here is on individual homeowners, many times at their most vulnerable point.”
While these numbers are alarming, they also prove that when federal, state and local law enforcement agencies join forces they can crack down on these con artists that take advantage of vulnerable homeowners.
Cal Haupt, president and CEO of Southeast Mortgage
The Distressed Homeowner Initiative focused on fraudulent activity that specifically targeted homeowners. This fraud included primarily foreclosure rescue schemes presented to vulnerable homeowners who had fallen behind on their mortgage payments and were at risk for making modifications and potentially going into foreclosure.
It isn’t difficult to see how easily the con artists succeeded given the market’s difficulty a year ago and the number of people that found themselves in dire situations with their mortgage payments.
Distressed homeowner schemes previously accounted for about four percent of mortgage fraud cases in the United States. Today, that number has risen to 20 percent, making distressed homeowner schemes more common than displaced loan-origination fraud.
The mortgage schemes not only affected those deceived, it ultimately affects the health of our economy and our ability to move forward. Falling victim to a scheme not only puts someone further into debt than they previously were, but a domino effect occurs as that debt widens to other aspects of their finances.
Officials have said that while the results of the Distressed Homeowner Initiative are meaningful in showing their active pursuit, it is difficult to prevent future scams from occurring. The results of the Distressed Homeowner Initiative could serve as a deterrent for future con artists but it is still imperative for every homeowner to take precautionary measures to ensure they do not fall victim to a scheme.
In a previous post on Saporta Report, Kathy Gyselinck mentioned an Atlanta area woman that was sentenced to 18 months in prison for running a scam similar to those run by people recently indicted by the DOJ. Kathy’s post cited some steps suggested by the FBI advisory to avoid becoming a victim of mortgage fraud. Be sure to familiarize yourself with those steps in light of the recent indictments.
As with any industry or business, there will be those who take advantage of others and deceive them – causing skepticism about the rest of the people in the industry who are conducting business honestly and with integrity.
When making any important financial decision – such as with your mortgage – always seek professionals with a proven, honest reputation.
