Tuesday, August 3, 2010

Fallout from the housing bubble

We seem to be hearing more lately on the enforcement side of the housing market.

Although the defendants have denied any wrongdoing, Countrywide has agreed to settle lawsuits with its shareholders for $600 million for misrepresenting the risks associated with its loose lending standards, according to the Los Angeles Times last night.

This follows last week’s announcement that Citigroup will settle with investors for $75 million over similar allegations.

California recently announced that it has revoked a record number of real estate licenses over the past year, because “The down turn in the real estate market has uncovered abusive practices which has caused the number of disciplinary actions to rise.” Mortgage loan modification fraud is being outpaced by short sale abuses according to the California Real Estate Commission.

In June, the U.S. Department of Justice announced an anti-fraud initiative called Operation Stolen Dreams to investigate and prosecute mortgage fraud.

According to the DOJ, the U.S. Attorney for the Northern District of Georgia is among the leaders of mortgage fraud prosecution.  More on DOJ’s efforts in North Georgia, including brief summaries of recent mortgage fraud cases in Atlanta, Lithonia, and Dunwoody, can be found here.

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