It hasn't been a good few months in the mortgage loan industry as federal authorities crack down on schemes involving builders and brokers who, Justice Department officials say, are responsible for more than $2.3 billion in losses.
Attorney General Eric Holder Jr. joined other law enforcement officials, including FBI Director Robert Mueller III, at Main Justice today to announce the results of an enforcement initiative called “Operation Stolen Dreams.” Since March 1, when the nationwide takedown began, 485 people have been arrested for alleged roles in mortgage fraud schemes.
This week, seven people were charged in Detroit with a $100 million scheme in which the participants allegedly posed as mortgage brokers, appraisers, real estate agents and title agents to recruit straw buyers to obtain 500 mortgages on 180 properties. Authorities said the participants placed multiple unrecorded loans on a single residential property without the lender’s knowledge. Yesterday, the Justice Department announced an indictment against Lee Farkas, former chairman of Taylor, Bean & Whitaker Mortgage Corp., for an alleged $1.9 billion scheme.
Holder said today that mortgage fraud is taking on “all shapes and sizes,” from schemes that targeted the elderly in Atlanta to schemes where immigrants in Miami were the intended victims. “We have seen cases that have resulted in dozens of foreclosures and millions in losses, as well as fraudsters who have bankrupted entire companies and national lenders who were not playing by the rules,” Holder said. He called the schemes “despicable.”
“Home ownership is an integral part of the American dream, and today we send a clear message to those who seek to shatter that dream: You will be held accountable for your criminal conduct,” said Ronald Machen Jr., the U.S. attorney for the District of Columbia, in a statement.
At the press conference, Holder also defended the administration’s handling of the BP oil disaster in the Gulf of Mexico. He had attended yesterday’s meeting at the White House between BP executives and administration officials.
“Let me be clear. I don’t apologize for the Justice Department’s role in this matter. I don’t apologize for the way in which this administration has approached this question,” Holder said. “We have dealt with this issue in a tough way to ensure that Americans who did no wrong will be compensated, that we do all we can to protect our environment and that not a penny comes from American taxpayers to do both of those things. I think what we have done has been entirely appropriate.”