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Mortgage Fraud Crackdown Hits Home

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By SHANNON BEHNKEN

The Tampa Tribune

Published: June 20, 2008

TAMPA - A nationwide crackdown on mortgage fraud that began in March has ensnared 18 Florida residents, whose charges were announced by federal authorities Thursday.

One Tampa mortgage broker, during the same period, was convicted and sentenced to more than eight years in prison.

The Florida cases are among 406 mortgage fraud investigations that have led to arrests and indictments nationwide since March, the FBI said.

More arrests in Florida are expected this summer.

"We have a number of ongoing cases, and we're keeping those close to the vest," said David Couvertier, spokesman for the Tampa FBI field office. "We will be putting a lot of people in jail for this in the very near future."

The crackdown on mortgage fraud comes in the wake of one of the worst collapses in the housing market in more than a decade, and is aimed at cleaning up the real estate industry so that fraudulent loans don't contribute to trouble in the housing market in the future.

The investigations and arrests were a joint effort of the FBI and other Justice Department personnel. At a news conference Thursday in Washington, the FBI and Justice Department announced arrests in a number of cities, including Miami, Chicago and Atlanta.

At least 60 arrests took place Wednesday and Thursday.

In a separate case, two former Bear Stearns managers in New York were arrested and charged Thursday with encouraging investors to stay in their hedge funds, heavily exposed to subprime mortgages, even as they knew the credit market was in serious trouble.

The mortgage fraud crackdown, dubbed "Operation Malicious Mortgage," started March 1 and ended this week. It targeted developers, mortgage lenders and brokers, lawyers, real estate agents and appraisers involved in organized mortgage fraud schemes.

Tampa Broker Gets 8 1/2 Years

The nationwide crackdown so far has resulted in 173 convictions and 81 sentencings, including a Tampa mortgage broker, Luis Uribe, 28. He was sentenced to 81/2 years in prison.

Nationwide, mortgage fraud losses to homeowners, lenders and others is estimated at more than $1 billion.

"Mortgage fraud poses a significant threat to our economy, to the stability of our nation's housing markets and to the peace of mind of millions of American homeowners," U.S. Deputy Attorney General Mark Filip said.

The FBI has 160 agents nationwide committed only to working on mortgage fraud, Couvertier said.

Banks reported almost 53,000 cases of suspected mortgage fraud last year, up from more than 37,000 a year earlier. The 2007 figures are about 10 times the number of suspected mortgage fraud reports filed in 2001 and 2002, according to the Treasury Department's Financial Crimes Enforcement Network.

The Tampa FBI office, which oversees Central Florida, has seen a 365 percent increase in suspected mortgage fraud cases since 2004. In 2004, there were 439 mortgage fraud complaints filed by lenders. By 2007, as the housing market crumbled, lenders filed 2,041 complaints about suspected mortgage fraud to the Tampa FBI office.

Florida A Hotbed

Florida is considered by mortgage experts to be a hotbed for mortgage fraud.

The FBI has said more suspected mortgage fraud cases were reported by lenders in Florida in 2007 than reported in the entire country in 2006.

Currently, Tampa ranks seventh on the agency's top 10 list for suspected mortgage fraud. The other Florida city on the list is Miami; it ranks fourth.

The most common type of mortgage fraud found is misstatement of income or assets. That is followed by forged documents, inflated appraisals and misrepresentation of a buyer's intent to occupy a property as a primary residence.

Information from the Associated Press was used in this report.

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