Despite Widespread Wrongdoing, Fed’l Prosecution of Institutions Involved in Mortgage Mess is Rare

Figure 6: Top Mortgage Fraud States by
Multiple Indicators, 2009

Posted Dec 22, 2011 2:35 PM CST
By Martha Neil

Despite widespread evidence of fraud and other wrongdoing, federal prosecutions related to the reckless mortgage lending that nearly brought down the nation's banking system in recent years are few and far between.

From the "robosigning" of thousands of mortgage foreclosure documents by individuals who apparently didn't have authority to do so to the thousands of active-duty members of the military who have lost their homes to foreclosure, even though they are legally eligible for stays and it is a misdemeanor to refuse to grant them, serious documented problems with the system abound concerning these and other issues, according to a Reuters special report.

"I think it's difficult to find a fraud of this size on the U.S. court system in U.S. history," said visiting Yale Law School professor Raymond Brescia. "I can't think of one where you have literally tens of thousands of fraudulent documents filed in tens of thousands of cases."  READ MORE

SEE ALSO:
2009 Mortgage Fraud Report “Year in Review”