The Congressional Subcommittee on Housing and Community Opportunity, chaired by Rep. Robert Ney (R-Ohio) will meet tomorrow for a hearing on mortgage fraud and its impact on mortgage lenders. Members are expected to hear testimony on how mortgage lenders and ultimately the market are affected by fraud schemes.
On Sept. 17, the FBI reported the largest nationwide operation in its history directed at individuals engaged in various real estate fraud schemes. The number of cases under investigation this year is five times the number of cases reported three years ago.
Financial institutions and lenders lose millions of dollars through mortgage fraud each year. Often, those losses are passed onto consumers in the form of higher loan fees. Mortgage fraud is a growing problem in the real estate industry, with more cases coming to the surface in recent years. Perpetrators often are professional real estate agents, mortgage brokers, title agents, appraisers and attorneys, and the complex crimes can cost financial companies millions of dollars in losses and litigation expenses.
“Consumers are not the only ones affected by abusive lending practices,” Ney said in a statement. “Financial institutions and other lenders are also victims of mortgage fraud and lose millions each year through this type of corruption.”
Scheduled to testify at tomorrow’s hearing are Kenneth Donohue, Sr., inspector general, Department of Housing and Urban Development; Chris Swecker, assistant director for Criminal Investigations, FBI; John C. Weicher, assistant secretary, Housing/Federal Housing Commissioner, HUD; William Matthews, VP and general manager, Mortgage Asset Research Institute; Marta T. McCall, SVP of Risk Management, American Mortgage Network on behalf of the Mortgage Bankers Association; Arthur J. Prieston, chairman, The Prieston Group; Brigitte Amiri, staff attorney, South Brooklyn Legal Services; and Ecima Trujillo, national field director, ACORN Housing Corp.
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