The heads of the Treasury, Justice Department, Department of Housing and Urban Development and Federal Trade Commission met with 12 state attorneys general and other authorities Thursday, vowing to crack down on mortgage fraud schemes that have proliferated since the start of the U.S. housing crisis.
“A clear lesson of this financial crisis is that American consumers need better protection against fraud,” said Treasury Secretary Tim Geithner, who along with Attorney General Eric Holder hosted the state and federal authorities. “While we will prosecute anyone who violated the law, going forward we will not wait for problems to peak before we respond. The Obama Administration is acting preemptively, across federal agencies and alongside state governments, to stop consumer fraud.”
The concerted move to target mortgage scams, especially illegal loan-modification and foreclosure swindles, came after Federal Bureau of Investigation Director Robert Mueller announced that mortgage fraud cases under investigation by the FBI had jumped 63 percent in the last year – and more than 300 percent since 2006.
“The schemes have evolved with the changing economy, targeting vulnerable individuals, victimizing them even as they are about to lose their homes,” Mueller said in testimony before the Senate Judiciary Committee Wednesday.
Officials are puzzling over just how to deal with a problem that they agreed was running rampant across the nation. Home foreclosure filings remained around their record highs last month, accounting for one of every 357 households in the U.S., the data provider RealtyTrac said.
The result: Many homeowners who are in arrears are falling for predatory scams online, in the mail and on the phone that promise to relieve them of their debt problems. But with luck and deft, the scammers can end up with borrowers’ personal and financial information, their money, and even their homes.
“These mortgage rescue scams raise false hopes and then cruelly exploit them, which is why my office is fighting them and welcomes the federal government as a strong ally,” said Attorney General Richard Blumenthal of Connecticut, which recently became the first state to ban up-front fees for mortgage repairs – a proposal that’s now being considered by other states.
The FTC also took the opportunity to announce it was initiating legal action against fraud perpetrators, bringing to 22 the number of such cases it has initiated this year.
The authorities also agreed they’d focus on preempting future violations by expanding consumer education programs and improving government efficiency to detect red flags.
“Consumer education is the new burglar alarm, and state-federal cooperative enforcement is the deadbolt that will protect homeowners from today’s crooks – fraudsters who claim to offer mortgage relief,” said Washington State Attorney General Rob McKenna.
“A clear lesson of this financial crisis is that American consumers need better protection against fraud,” said Treasury Secretary Tim Geithner, who along with Attorney General Eric Holder hosted the state and federal authorities. “While we will prosecute anyone who violated the law, going forward we will not wait for problems to peak before we respond. The Obama Administration is acting preemptively, across federal agencies and alongside state governments, to stop consumer fraud.”
The concerted move to target mortgage scams, especially illegal loan-modification and foreclosure swindles, came after Federal Bureau of Investigation Director Robert Mueller announced that mortgage fraud cases under investigation by the FBI had jumped 63 percent in the last year – and more than 300 percent since 2006.
“The schemes have evolved with the changing economy, targeting vulnerable individuals, victimizing them even as they are about to lose their homes,” Mueller said in testimony before the Senate Judiciary Committee Wednesday.
Officials are puzzling over just how to deal with a problem that they agreed was running rampant across the nation. Home foreclosure filings remained around their record highs last month, accounting for one of every 357 households in the U.S., the data provider RealtyTrac said.
The result: Many homeowners who are in arrears are falling for predatory scams online, in the mail and on the phone that promise to relieve them of their debt problems. But with luck and deft, the scammers can end up with borrowers’ personal and financial information, their money, and even their homes.
“These mortgage rescue scams raise false hopes and then cruelly exploit them, which is why my office is fighting them and welcomes the federal government as a strong ally,” said Attorney General Richard Blumenthal of Connecticut, which recently became the first state to ban up-front fees for mortgage repairs – a proposal that’s now being considered by other states.
The FTC also took the opportunity to announce it was initiating legal action against fraud perpetrators, bringing to 22 the number of such cases it has initiated this year.
The authorities also agreed they’d focus on preempting future violations by expanding consumer education programs and improving government efficiency to detect red flags.
“Consumer education is the new burglar alarm, and state-federal cooperative enforcement is the deadbolt that will protect homeowners from today’s crooks – fraudsters who claim to offer mortgage relief,” said Washington State Attorney General Rob McKenna.
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