Connecticut Creates Mortgage Fraud Task Force

The United States Attorney Office in Connecticut over the past year has convicted a mounting number of mortgage fraud cases. The cases were investigated under a collaboration of multiple law enforcement agencies.

Kimberly K. Mertz, Special Agent in Charge of New Haven Division of the Federal Bureau of Investigation and Nora R. Dannehy, United States Attorney for the District of Connecticut, announced on August 5, that a Task force would be formed to handle these cases.

The new task force includes representatives from the U.S. Attorney’s Office; The Federal Bureau of Investigation; Internal Revenue Service – Criminal Division; United States Postal Inspection Service; U.S Department of Housing and Urban Development; Office of Inspector General; The Federal Deposit Insurance Corporation; and the State of Connecticut Department of Banking. The task force will be called The Connecticut Mortgage Task Force (CMTC). It will assist the concentrated efforts in investigating and prosecuting mortgage fraud and related financial crimes for the state of Connecticut.

The task force will be instrumental in making sure those you profited from Mortgage Fraud and other financial crimes are brought to justice.

Mortgage crime cases usually involve false representations on mortgage loan applications: such as falsifying income, employment, assets, liabilities and appraisals. The task force primary focus will be to investigate mortgage fraud schemes that involve multiple suspects, borrowers and millions of dollars in fraudulent loans. The will also investigate emerging crimes created by the growing tend in foreclosures; such as Foreclosures Specialist and Short Sale Schemes.

Foreclosure Specials Schemes go something like this: an individual persuades a homeowner to sign over the deed or note of the home to a Foreclosure Specialist. The specialist convinces the homeowner that they can stay in their home and make “rent payments” and eventually purchase the home back. The Foreclosure Specialist then retains the rent payments and fees and ceasing paying on the mortgage. The home falls into foreclosure leaving the homeowner with nothing. In addition, if the home has any equity the Specialist refinances the home and pulls the equity out and retains it for his continued illegal scheme.

Short Sale Schemes run something like this: A buyer purchases a home without the intentions of making payments, often with additional funds are included in the purchase to make improvement to the property. The improvements are never made and the buyer keeps the cash. The buyer waits a month or two and informs the lender that the house will be foreclosed; however he has another buyer for the home. The thief and his accomplice offer the lender a pre-foreclosure. The accomplice purchases the property at a bargain due to the “damage of the property” and the lender agrees. The accomplice then fixes the damages and sells the property for a profit.

Dannehy and FBI Special Agent Mertz urged homeowners to verify who they are doing business with and that they should never transfer the title to their property or disclose personal information unless the know they are dealing with a reputable business.