FOR IMMEDIATE RELEASE September 5, 2007 www.texasattorneygeneral.gov |
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Texas Residential Mortgage Fraud Task Force Convenes to Address Growing Housing Crisis Law enforcement, state agencies take aim at dramatic rise in foreclosures, mortgage scams |
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AUSTIN – Texas Attorney General Greg Abbott and key officials from state regulatory agencies today convened the Texas Residential Mortgage Fraud Task Force, a strategic partnership intended to improve collaboration among residential mortgage regulators and law enforcement officials. Task force members, including the attorney general and top real estate, banking and consumer credit regulators, will examine how to track and reduce mortgage fraud in Texas. “Home ownership lies at the heart of the American dream,” Attorney General Abbott said. “To better track and prosecute mortgage fraud, the Texas Residential Mortgage Fraud Task Force will form a strategic alliance between law enforcement and regulatory agencies. We are committed to protecting Texas homeowners and cracking down on mortgage fraud.” The Texas Residential Mortgage Fraud Task Force was created under House Bill 716, which was authored by Rep. Burt Solomons (R-Carrollton) and Sen. Kip Averitt (R-Waco) during the 80th Legislative Session. The 2007 legislation was intended to reduce false or misleading information on residential home loan applications by increasing cooperation among regulators and requiring new disclosures at closing. Effective Sept. 1, mortgage lenders, bankers and brokers are required to warn loan applicants about the legal consequences of knowingly supplying false information on a residential loan application. Additionally, with the consent of the local district attorney, the attorney general is granted concurrent jurisdiction to prosecute criminal mortgage fraud cases, including those involving money laundering, loan document falsification, and mail or wire fraud. “House Bill 716 is designed to more easily catch white collar criminals and put them behind bars where they belong,” State Representative Burt Solomons said. “We must take the necessary steps, including strengthening criminal penalties, to protect consumers and legitimate lenders in the mortgage loan process from fraud.” “Mortgage fraud is a serious, costly crime, and legitimate home buyers end up paying the price,” State Senator Kip Averitt added. “Through the Residential Mortgage Fraud Task Force, we will form a strategic partnership with local, state and federal officials, enabling law enforcement and state agencies to better track and prosecute mortgage fraud and its perpetrators.” Criminal mortgage fraud includes illegally inflating property appraisals; concealing a second mortgage from a primary lender; and concealing or stealing a borrower’s identity. Under the Deceptive Trade Practices Act, the OAG has authority to prosecute misleading practices and has recovered millions of dollars for Texans harmed by title scams, undisclosed costs and other unlawful mortgage-related schemes. State agencies and officials represented on the Texas Residential Mortgage Fraud Task Force include: the Attorney General; the Consumer Credit Commissioner; the Banking Commissioner; the Credit Union Commissioner; the Commissioner of Insurance; the Savings and Mortgage Lending Commissioner; the Texas Real Estate Commission; and the Texas Appraiser Licensing and Certification Board. Under Sec. 402.032 (h) of the Texas Finance Code, the attorney general “shall oversee administration of the task force.” Earlier this year, the OAG obtained $21 million in restitution for Texans harmed by lending giant Ameriquest Mortgage Co.’s deceptive lending practices. The settlement resolved allegations that Ameriquest and its affiliates did not adequately disclose certain terms to homeowners, including whether loans carried fixed or adjustable rates. According to court documents filed by the OAG, Ameriquest also charged excessive origination fees and prepayment penalties, refinanced borrowers into improper loans and inflated appraisals that qualified borrowers for loans. In 2006, Attorney General Abbott negotiated a landmark agreement with Green Tree Servicing L.L.C., a Minnesota-based firm that services manufactured housing debts in Texas. Under the settlement, Green Tree agreed to assist more than 1,200 Texas homeowners who may have been issued invalid titles to homes they purchased from more than 115 unlicensed retailers in 2003. In a related move, the Attorney General secured an injunction and asset freeze against the unlicensed sellers. The Office of the Attorney General has also halted scams purporting to save homeowners’ properties from condemnation. It has also cracked down on various title-related and refinancing scams. To better assist Texans who are considering a mortgage loan, Attorney General Abbott also added new online resources to the agency’s Web site (www.oag.state.tx.us). The new Web page, “Avoiding Home-Buying Pitfalls and Scams,” provides consumers with specific guidelines about the home-buying process as well as other helpful information. The Web page also helps homeowners recognize “foreclosure rescue” scams, equity-stripping schemes and other pitfalls to avoid when refinancing a home. The most common pitfalls home buyers should be wary of include:
For more home buying tips, brochures, consumer columns and additional information on the mortgage industry, visit the Office of the Attorney General’s Web site at www.oag.state.tx.us |
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