Mortgage Fraud, Foreclosure Scams, and Local Law Enforcement
On October 29, 2008, the COPS Office hosted a conference call with members of the local and federal law enforcement community to discuss investigations and prevention of mortgage fraud and foreclosure rescue scams. Participants agreed that more local law enforcement resources will be needed to address these crimes in the near future, as they are rapidly becoming more common.
From this call, a number of representatives from police agencies across the country offered examples of preventative measures that law enforcement agencies can use to counteract the damage these schemes inflict on our communities.
Local Law Enforcement Responds:
Educating the Community
Portland Police Department
The Portland Police Department has drafted a letter that describes various equity skimming, also known as "foreclosure rescue," scams. This letter is sent to all homeowners who are late on their mortgage payments and have recently been sent a Notice of Default, which is a formal document that usually begins the foreclosure process. The Notice of Default list is a part of the public record and can be accessed by anyone, including criminals who are looking to target already desperate homeowners.
Building Strong and Comprehensive Partnerships
Miami-Dade Police Department
Hit especially hard by foreclosures, the state of Florida currently leads the nation in mortgage fraud activity. The Miami-Dade Police Department and the Office of the Mayor have responded by forming a Mortgage Fraud Task Force, which includes members of multiple municipal agencies, local business leaders, and prosecuting attorneys' offices. Through legislative changes, community education, and regulation, this task force aims at a comprehensive and coordinated effort in tackling mortgage fraud and the harm it causes to the community.
Perpetrators of mortgage fraud and foreclosure rescue scams often commit identity theft to support their schemes. This Problem-Oriented Policing Guide helps law enforcement analyze and develop responses to their local problem.
Foreclosure "Rescue" Schemes: A Rising Trend in White Collar Crime
This article from the CP Dispatch newsletter explains foreclosure rescue schemes and their growing incidence over the past few years.
The following sites were recommended by members of law enforcement who investigate mortgage fraud and related crimes.
Federal Bureau of Investigation - Mortgage Fraud
This section of the FBI's web site discusses statistics and trends relating to mortgage fraud in the United States. Also included on this page are descriptions of many common mortgage fraud schemes, mortgage fraud indicators, and prevention tips.
The secure members section of this site, for regulators and investigators, explains documents needed for investigating mortgage fraud, examples of affidavits for search warrants, and other resources for law enforcement investigators. E-mail the webmaster on the Contact Us page to verify your association with a law enforcement agency and gain access to these resources.
The Home Equity Theft Reporter
This blog focuses specifically on home equity theft and offers links to specific state statutes. Also included are links to many videos that can educate the public about foreclosure rescue scams.
Freddie Mac's "Avoid Fraud" Video on YouTube - English and Spanish
These videos, produced by Freddie Mac, explain a basic foreclosure rescue scam known as equity stripping. Available both in English and Spanish.