The team of 17 lawyers and eight special agents from the state Department of Justice will pursue corporate fraud, scams and fraudulent lending practices, Atty. Gen. Kamala Harris says.
California Atty. Gen. Kamala Harris, saying that years of unscrupulous lending still haunts the state, is creating a 25-person task force to target mortgage fraud of any size — from small operations that preyed on troubled borrowers to corporations that sold risky loans as safe investments.
The team of 17 lawyers and eight special agents from the state Department of Justice will pursue three major areas, Harris said in an interview:
•Corporate fraud, including instances in which bundled mortgages were sold as securities to the state or its pension funds under false pretenses. Harris said her office plans to prosecute some cases under California's False Claims Act, which she described as "one of those very powerful tools that California uniquely has … to pursue, in essence, what are false claims that are submitted to the state."
•Scams, including instances in which consultants, lawyers and others took fees from people in foreclosure, saying they would help the homeowners get loan modifications or other remedies, but delivered nothing.
•Fraudulent lending practices, including deceptive marketing, failure to fully disclose loan terms and qualifying people for loans who couldn't afford the terms.
Read on.
More from AG Harris website:
At her announcement of the new mortgage fraud unit, Attorney General Harris was joined by Mayor Antonio R. Villaraigosa, representatives from U.S. Department of Housing and Urban Development (HUD) and the Center for Responsible Lending, as well as homeowners harmed by unlawful lending, servicing and foreclosure practices.
"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," said Attorney General Harris. "We are setting a high bar for other states and we insist that homeowners be protected, respected, and informed."
The Mortgage Fraud Strike Force will operate out of Department of Justice offices in Los Angeles, Fresno, San Francisco and Sacramento. Twenty-five attorneys and investigators will work together in three teams:
- The 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.
- The 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.
- The 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
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