California Attorney General Kamala Harris today announced she’s creating a Mortgage Fraud Strike Force staffed by state Department of Justice attorneys and investigators charged with the duty of “protecting innocent homeowners and bringing to justice those who defraud them,” according to her news release.
“Californians in search of the American dream all too often found a protracted personal and legal nightmare. Families are losing their homes, while those who perpetrated crimes and frauds against them walk free,” Harris said. “We will work to safeguard the homeowner at every step of the process – from origination of a loan to its securitization, and we will prosecute to the fullest extent of the law those who take advantage of trusting California families. We are setting a high bar for other states and we insist that homeowners be protected, respected, and informed.”
Harris rolled out the new initiative in Los Angeles this afternoon, accompanied by LA Mayor Antonio Villaraigosa and representatives from the U.S. Department of Housing and Urban Development and the Center for Responsible Lending.
Harris’ news release says the strike force will work out of state Justice Department offices in San Francisco, Fresno, Los Angeles and Sacramento, with 25 attorneys and investigators broken into three teams. A consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams. A criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief. And corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.
There were foreclosure filings against 546,669 California homes in 2010; an estimated 2 million California homes will enter the foreclosure process from 2009 through 2012. The state Justice Department reports it has received thousands of complaints related to foreclosure scams, mortgage fraud, and mortgage servicing practices in the past year.
“The fingerprints of illegal activity are all over the foreclosure crisis,” said Paul Leonard, director of the Center for Responsible Lending’s California office. “The Attorney General’s effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news.”
Homeowners who believe they’ve been scammed can file complaints through the Attorney General’s website.