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The FBI’s Mortgage Fraud Probe Now Targets 19 Firms
We learned some interesting things today about the FBI’s probe into real estate and mortgage fraud at some of Wall Street’s top financial institutions. According to FBI Director Robert S. Mueller, III’s testimony before the U.S. Senate Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related Agencies, the Bureau’s investigation of real estate fraud in the mortgage industry now encompasses 19 companies, up from 17 just one month ago. In Mueller’s own words:
- “We’ve had a tremendous surge in cases related to the subprime mortgage debacle. We currently have almost 1,300 cases that have grown exponentially over the last several years and we expect them to grow even further.”
- “We have also 19 cases involving institutions themselves where mortgage fraud may have contributed to misstatements and the like.”.
Mueller, who was testifying on Capital Hill in defense of the FBI’s budget request for 2009, also said that when the Bureau’s budget request was originally drafted, the subprime mortgage mess had not yet “grown to the point where we could see the extent of the surge,” and that he was not certain at this point when we can expect to see the extent of the surge.
Additional information, from Reuters:
Bureau officials declined to name any additional companies targeted in the probe. “We’ve always said it was a fluid number,” FBI spokesman Stephen Kodak said. “It could change at any time.” He said the bureau has publicly acknowledged only one company as involved — Doral Financial Corp (DRL.N: Quote, Profile, Research). A former Doral treasurer was indicted for investment fraud last month. He denied the allegations and the company declined to comment.
The largest U.S. mortgage lender, Countrywide (CFC.N: Quote, Profile, Research), also is under FBI investigation, authorities have said, although the FBI has declined to comment and Countrywide said it was unaware of any investigation. When the FBI disclosed its industry investigation, major investment banks Goldman Sachs (GS.N: Quote, Profile, Research), Morgan Stanley (MS.N: Quote, Profile, Research) and Bear Stearns Cos (BSC.N: Quote, Profile, Research) each said the government had asked them for information, but there was no confirmation of any FBI role. Beazer Homes (BZH.N: Quote, Profile, Research) said last year it had received a federal grand jury subpoena related to its mortgage business.
Filed under: Uncategorized, Mortgage Fraud, FBI, Subprime Mortgages, Mortgage Meltdown, Countrywide
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The 19 firms need to be disclosed so that the public can keep an eye on the developments.
It would also be interesting to see how many government favorite banks are involved.
In the linked article above, Atty General Cuomo of New York wanted to investigage Fannie Mae and Freddie Mac in connection with deals they purchased from Washington Mutual.
This investigation was quickly put down by the OFHEO), the federal regulator that oversees mortgage giants Fannie Mae and Freddie Mac.
Government needs to remember that they are responsible “to the people” and that “we the people” are the best oversight method there is.
Comment by Larry Rubinoff — April 17, 2008 @ 12:12 am
Mortgage Summary
Downey Platinum came to us and said we can help you get out of foreclosure by short sale temporary. We didn’t know what that meant so they explained. If we had a relative that had good credit willing to buy our house they could go to our mortgage company with an offer for less than what is owed. We owed $224,000. So they would offer around $180,000. Or $190,000. To start and that we would remain on the deed with the person that was the buyer for a period of one year. Our payment would than be lower than what we are currently paying which was $1719.23, and an equity cash out of about $40,000. Also they would repair our credit score so that we could buy back with a good interest rate. By doing it this way we could remain in our home with payments we could afford. We though about it and said this is good because I needed a car. We asked how long this would take because we are in foreclosure now and we don’t have much time. They said about a month. It took them from Aug. 07 to Jan. 25th 08 and with every month their was an extension and a change about 5 days before the extension was to be up and we were told we had no other choice because our mortgage company was going to sale the property and this is the only way, and then they get another extension for month. First they told us our payments would be like a $1000. Per month and then about 1150.00 monthly. And it went like this until we sit down at the table to sign documents they hit us with our payments would be $2000.00 per month I could have died. How can we afford $2000.00 a month when we couldn’t afford $1719.00 a month what are we going to do?. Then they said well we are putting $9000.00 in a trust in the buyers account to help with the payments you can pay $1400. And $600.00 will come from the trust account. This was 5 days before the mortgage company would auction our house. And we got nothing for the sale of our house except higher payments than before. And to top it all is that we were suppose to get a copy of the papers we all signed that day and they started making copies and said that the copy machine broke and they would have send us copies by mail that never came we call and ask for the paper work and they said oh we mailed them today every time we call this is what they say. Until my husband talked to his aunt about it and she went down there and she mailed us those papers of about 10 sheets which told us that they took $30,000.00 of our equity for them to put down payment for our house. And put it in the document that we gave them that money we knew nothing about. They sold our house for over $300,000.00 and that was so wrong I could not believe it. That is why they were buying time and would not let us have the papers signed. Because it would be too late for us to do anything about it. This crushed me and my husband. We are so stress out about what happened us and we don’t know where to turn because we don’t have money for anything other than make these mortgage payments and utilities.
Comment by maxcine bright — April 18, 2008 @ 4:48 pm
It’s unlikely the govt will disclose the names of the big corporations they’re investigating but they could be in other public documents. I suspect some of the companies under investigation now for securities fraud and mortgage fraud are included but who knows. E.g. Beazer Homes, Countrywide, KB Home and others have been in news for this sort of thing.
I have a feeling the co’s have the money to pay a multi-million dollar fine “without admitting guilt” and the govt will accept that. Maybe that’s what they’re hoping for. I’d prefer to see some of these people do jail time.
Also while investigating, govt agencies won’t reveal info they don’t want to. Once they are done though, the info “should” be available thru the Freedom of Information Act. I got the names of nearly 40 builders in OK involved in sham title co’s and illegal kickback schemes, thru a FOIA request on HUD records. The news didn’t name them. The names are now posted on this forum, under General, titled “Okla. builders in HUD investigation.” http://forums.delphiforums.com/okhomeowner/start
I also think the names should be revealed. The public needs to know. If we weren’t kept in the dark so much maybe more consumers would be wise to scams and avoid them. You notice any small-time companies are named when they’re investigated and reported in the news, so I don’t know of any VALID reason the govt can’t also name big co’s under the same type investigations.
Comment by CS — April 18, 2008 @ 5:37 pm
Ugh, Maxine, I’m so sorry. I’m sure there are plenty of people who will question why you signed or did what you did, but anyone who has been there understands that desperation makes you ripe picking for scam artists.
I sincerely hope you find some relief.
Comment by Dawn — April 18, 2008 @ 7:04 pm
CS, I totally agree with you. Disclose everyone. The way it is being done makes it appear that the only crimes being committed are by the small guy. The media seems like they are also controlled by not disclosing information to the public which is their obligation. Media needs to report not distort.
To Maxine Bright, I am sorry for your experience. I am glad you were brave enough to tell your story here.
Short Sales are a valid solution for many. The problem is Short Sales have opened the door to many new scammers. I see this happening more and more. Like any other business, there are good people involved. The bad ones prey on the fear and distress of individuals.
Because of your post Maxine, I would hope it alerts others in your situation to seek legal advice before entering into this type of situation. Have an attorney review any documents and agreements before you enter into a Short Sale agreement and BEFORE you quit claim your deed over to them.
Comment by Larry Rubinoff — April 22, 2008 @ 3:48 pm