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Washington state steps up fight against mortgage fraud

New fund lets prosecutors intensify investigations

Last year, a mortgage broker in the Tacoma, Wash., area filed a false second lien against a property as it was headed to closing. The man planned to take advantage of an unsuspecting couple and quietly pocket $24,000 into his own account when the loan eventually funded. Until recently, county prosecutors -- already deluged with other major crimes -- faced a difficult decision: Should they place other compelling cases on the back burner and go after a mortgage fraud case? The Tacoma case was investigated and prosecuted, thanks to a special pool of funds earmarked for mortgage fraud. Other states, including California, also have adopted a Mortgage Lending Fraud Prosecution Account where a $1 or $2 surcharge is tacked on to every recorded Deed of Trust in the state. According to the Washington state attorney general's office, this cash -- about $1 million annually -- allows authorities to more readily field complaints and scrutinize every step made by every player in the mortgage lending ...

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