DOJ Forced to Revise Inflated Mortgage Fraud Numbers

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Last October, the Department of Justice (DOJ) claimed that after a one-year investigation, run by its Mortgage Fraud Working Group (MFWG), they indicted 530 people who had victimized more than 73,000 people. They added homeowners had lost $1 billion in mortgage fraud. The DOJ boasted their task force had pursued and uncovered mortgage fraud and the group “had success, in an historic, government-wide commitment to eradicating mortgage fraud and related offenses”.

But reporters wanted to see the list of those 530 people charged with ripping off homeowners. Many had remembered the DOJ’s press conference from 2010 touting a ‘sweep’ with “Operation Broken Trust” which dealt with mortgage-fraud. The ‘sweep’ wasn’t exactly a ‘sweep’. As one reporter put it, “Broken Trust” was more like a few small-fry, penny-ante fraud cases that had nothing to do with one another.

Then there was the debacle of the Mortgage Fraud Working Group. There was great fan fare as it was announced this one-year initiative task force was going to clean up the mortgage fraud. Months went by and there were still no offices, phones or staff for the MFWG. No one at the DOJ knew where to direct callers – there simply wasn’t an MFWG.

For nearly a year, reporters kept asking for that list of 530 people. They finally received the real statistics after an FBI memo revealed the task force greatly overstated the amount of fraud victims, the number of charges filed, and the size of the related monetary losses.

Fridays are notorious for ‘dumping’ news stories. The ‘Friday news dumps’ are lost, never read or forgotten over the weekend.

Following pressure from the FBI, the DOJ “updated” their “success numbers” in an incredible ‘news dump’ late Friday, August 8, 2013.

The 530 people who had been indicted last year were actually 107 people – an 80% drop. And more than 73,000 victims? Those numbers were ‘revised’ to 17,185 – nearly 80% less. The number of alleged losses fell over 90% – nowhere near the $1 billion originally reported.

Last year, there were over 2,300,000 foreclosures and 700,000 homes repossessed. Every 13 seconds another foreclosure is filed in the U.S. Foreclosures are down this year, but the mortgage nightmare continues. Statistics show half the foreclosures have a legal problem.

Mortgage foreclosure scams rose 60% as banks and lenders continue to sit on fraudulent mortgage documents. Remember the investigation in San Francisco where nearly ALL the foreclosure documents had legal problems or were deemed suspicious?

There are over 20 federal agencies, 94 U.S. Attorneys Offices, state and local partners battling fraud for us. In January 2012, yet another group was formed, the Residential Mortgage-Backed Securities Working Group (RMBS) which operates as part of the Financial Fraud Enforcement Task Force (FFE).

One would hope there would be more than a paltry 107 people charged with fraud.

More significant is how disheartening that the agencies set up to help homeowners are now seen as lacking in integrity due to their inflating numbers and misleading the public.

Keith A. Gantenbein, Jr. is a Colorado consumer advocate attorney, foreclosure defense and real
 estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes: foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure
defense legal assistance. He also handles bankruptcies, wrongful credit reporting, mortgage negotiations, lender liability, real estate, civil litigation, debt defense, debt harassment, contracts and landlord/tenant.
 If you think you will be
facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your
situation and go over all your options with you.

About theglawfirm1

Gantenbein Law Firm is a Denver, Colorado Tax Law Firm, servicing all of Colorado. Gantenbein Law Firm also specializes in Colorado Real Estate Law, Colorado Foreclosure Defense, Wills & Trusts, and Business Law.
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