California will start its own mortgage fraud “strike force” to investigate alleged corruption at every stage of the lending process, from loan origination through the sale of mortgage-backed securities, according to a recent announcement by Kamala D. Harris, the state’s attorney general.
“Families are losing their homes, while those who perpetrated crimes and frauds against them walk free,” Harris said in a press release. “(W)e will prosecute to the fullest extent of the law those who take advantage of trusting California families.”
The strike force will have 25 attorneys and investigators spread between Los Angeles, San Francisco and Fresno. One team will focus on crimes against consumers, including deceptive marketing, predatory lending, and scammers offering bogus loan modification and foreclosure avoidance programs. Another team will specialize in large-scale frauds, including money laundering and illegal investment schemes. The third team will focus on corporate crimes, especially in the area of mortgage-backed securities sold to investors.
At the press conference announcing the strike force, Harris was joined by Los Angeles mayor Antonio R. Villaraigosa and Paul Leonard, director of the California office of the Center for Responsible Lending.
“The fingerprints of illegal activity are all over the foreclosure crisis,” Leonard said. “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.”
Villaraigosa also welcomed the new effort, since Los Angeles witnessed nearly 10,000 foreclosures last year. In 2010 there were 546,669 foreclosure filings in the state.
[Related article: New Legislation Aims to Curb Mortgage Servicer Abuses]
Image: Erin Pettigrew, via Flickr