Feds: LA County 'Epicenter' For Mortgage Fraud
LOS ANGELES (CBS) — Amid a historic wave of foreclosures, Los Angeles County has become the
"national epicenter of mortgage fraud," according to federal officials.
The announcement comes as the Los Angeles Mortgage Fraud Summit convenes in the city that now ranks No. 1 in the nation in the number of mortgage fraud reports made since 2008.
US Attorneys Caution Against "Too Good To Be True" Mortgages
Tony West, assistant attorney general at the U.S. Department of Justice in Washington, D.C., said 1.7 million American homeowners received foreclosure notices in the first half of this year and the number of properties banks have taken back hit an all-time high last month, it was reported.
"The situation in California has been particularly dire and by any measure California is among the two or three states most affected by mortgage fraud," West said.
In the state, banks filed nearly 350,000 foreclosure notices from January to early August, West said. In the county, more than 400,000 homeowners have negative equity - meaning they owe more on their mortgages than their homes are worth, West said.
"That is the third-highest rate in the entire country and those seeking to take advantage of these hard economic times are striking the community," he continued.
West was among numerous members of the national Financial Fraud Enforcement Task Force that met at the U.S. Attorney's Office in downtown Los Angeles. The task force was established by President Obama in November 2009 to investigate and prosecute financial crimes, including a variety of mortgage
fraud schemes.
"(This summit) is particularly timely because our region is now a national epicenter of mortgage fraud," said Andre Birotte Jr., the U.S. attorney for California's Central District. "In the last month alone, my
office has indicted two dozen defendants for their involvement in mortgage and real estate fraud, and has pursued civil remedies in other mortgage fraud cases."
On Thursday, U.S. Attorney's Office announced a federal grand jury indicted Downey resident Juan Rangel, 46, on a series of fraud charges for allegedly running a Ponzi scheme that took more than $11 million from more than 300 victims, and a mortgage fraud scheme that preyed on homeowners by stealing the equity from their homes and secretly taking title to their properties.
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