Wednesday, March 19, 2008

Jerry Brown Hits Mortgage Fraudsters

By Chris Thompson
Wed, Mar 19, 2008 at 7:05 AM

Hey, how 'bout that Jerry Brown? Say what you will about his tenure as Oakland's mayor, the state's top cop picked a sweet fight yesterday when he moved to shut down seven mortgage companies that, state prosecutors charged, forged signatures and duped gullible homeowners into mortgage refis that left them homeless and destitute.

The Associated Press reports that the Attorney General's office has filed a lawsuit that would force the companies to pay $20 million in fines and restitution to desperate homeowners. The companies allegedly lured unsophisticated homeowners, who were managing to make their payments, into agreeing to refinance their mortgages at terms so expensive that they defaulted on their loans and may lose the homes they worked so hard to buy. In some cases, Brown's office charged, brokers lied about the true amount of the new monthly payments, or forged signatures to refi documents when the borrowers tried to back out of the deal.

As this paper has reported, mortgage fraud has spiked to unprecedented levels as the subprime housing market exploded. Now, with foreclosures rising to historic levels, new breeds of scammers are preying on terrified borrowers, many of whom don't understand mortgage financing, and some don't even speak English. Many law enforcement agencies regard this terrible problem with an infuriating nonchalance; good on Brown for giving it the priority it truly deserves.

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