Federal and state agencies are collaborating to form the largest task force to date to target mortgage fraud. The new task force is called Operation Stolen Dreams and went into effect on March 1, 2010.
Authorities have identified 1,215 suspected cases of mortgage fraud and have made 485 arrests. Thirty four of these cases took place in Utah and have resulted in imposing sentences, criminal complaints, indictments and convictions.
Mortgage fraud can include activities such as illegal property flipping, incorrect or incomplete statements on mortgage applications, and internet and email scams. Many of the cases targeted by Operation Stolen Dreams involve someone knowingly providing false information regarding income, assets, matters of identification, debt or inflating value on property when applying for a mortgage with a financial institution. Unfortunately, some people applying for mortgages may have to increase the likelihood that the applicant would obtain a mortgage. This people may also be caught in the mortgage fraud sting.
The Goals of the Task Force
There has been a huge rise in mortgage fraud in the past seven years. In 2003, the Financial Fraud Enforcement Task Force reported 500 known cases of mortgage fraud. As of May of this year, there are 3,000 known cases.
Operation Stolen Dreams is the first task force to focus not only on filing criminal charges in federal courts but also to follow through with civil enforcement and recovering losses for the victims of mortgage fraud.
The task force claims the alleged scammers are responsible for more than $2.3 billion in losses. The operation has already recovered $147 million. The Department of Justice has recently requested $178 million in federal funds to continue the battle against mortgage fraud in 2011.
The Effects of Mortgage Fraud
Mortgage fraud has been described as having a ripple effect on society. Victims have lost billions of dollars nationwide and so far the task force has recovered only a fraction of the lost capital.
Utah residents have noticed the difference in the real estate market. When properties sell at inflated prices, neighboring properties become artificially inflated. Property taxes increase and property values decline.
With the current economy and housing market, the people that are looking or financially able to buy property are being further scrutinized by banks that are less willing to lend.
“Mortgage fraud ruins lives, destroys families and devastates whole communities…” said U.S. Attorney General Eric Holder. Operation Stolen Dreams is an effort to counteract that destruction.