California Announces Creation of a Mortgage Fraud Task Force to Pursue Mortgage Fraud at All Levels
By The White Collar Crime and Regulatory Enforcement & The Global Banking and Payment Systems Practices
On May 23, 2011, California Attorney General Kamala Harris announced the creation of a new Mortgage Fraud Task Force (Task Force) to address allegations of widespread fraud impacting the State of California. The objective of the 25-member Task Force (consisting of 17 lawyers and 8 special agents from the California Department of Justice) is to investigate and prosecute fraud and fraudulent lending practices at all levels, from origination through securitization. In deciding to form the Task Force, Attorney General Harris stated that no case will be too big or too small to pursue.
The Task Force will focus on allegations of mortgage fraud in three major areas: (1) fraud involving mortgage-backed securities sold to the state or its pension funds; (2) fraudulent lending practices, including deceptive marketing and failure to fully disclose loan terms; and (3) scams by consultants, lawyers, and others who charged fees in connection with foreclosure proceedings and/or loan modifications without delivering on their promises. The Task Force will operate out of offices in Los Angeles, Fresno, San Francisco, and Sacramento. The Attorney Generals Office has expressed its intention to pursue all avenues available to the State to rectify harms caused by mortgage fraud, which the Attorney General contends was a significant contributing factor to the housing crash and is a continuing financial drag on the economy in the State of California.