California Attorney General Kamala Harris announced the launch of a Mortgage Fraud Strike Force responsible for protecting innocent homeowners and bringing to justice those who defraud them.
The Strike force will be staffed by Department of Justice attorneys and investigators and will comprise both civil and criminal enforcement teams. They investigate and prosecute violations at every step of the mortgage process from origination to the selling of mortgage-backed securities.
"Californians in search of the American dream all too often found a protracted personal and legal nightmare," said Attorney General Harris. "Families are losing their homes, while those who perpetrated crimes and frauds against them walk free."
Operating out of four offices in Los Angeles, Fresno, San Francisco and Sacramento, Twenty-five attorneys and investigators will work in three teams:
- The consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams.
- The criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief.
- The corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.
"The fingerprints of illegal activity are all over the foreclosure crisis," said Paul Leonard, director of the California Office, Center for Responsible Lending. "The Attorney General's effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news."