Foreclosure Fraud Costing These 5 States The Most: Report
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Millions of Americans have been forced out of their homes in the wake of the housing collapse, and from that has come allegation after allegation of foreclosure fraud by the responsible lenders. In certain hard-hit states, the costs of such improper action is starting to pile up.
Mortgage fraud cost several states over a hundred million dollars in the third quarter of this year, according to mortgage industry news website MortgageDaily.com. All of the top states have seen their faire share of headlines about alleged foreclosure fraud. Florida, once a housing boom hotspot, was hit especially hard after the bubble burst. And despite only having the third-highest foreclosure fraud cost, it remains the state with the highest volume of cases, MortgageDaily.com reports.
Mortgage fraud may be more rampant than previously thought on a national scale. Eileen Foster, a former executive at Countrywide Financial, once the largest lender in the nation, told CBS's 60 Minutes that mortgage fraud was "systemic" and par for the course in the industry.
Pressure lately has heated up on banks to more carefully review cases before foreclosing on homeowners. Earlier this month, Massachusetts Attorney General Martha Coakley announced a law suit against five of the top mortgage lenders -- JPMorgan Chase, Bank of America, Wells Fargo, Citibank and Ally Financial Inc. -- alleging the banks improperly foreclosed on homeowners while doing little to help homeowners obtain loan modifications. Likewise, Attorneys General from California, which tops this list, and Nevada, have teamed up to persecute mortgage fraud after growing frustrated with a potential national settlement.
Nevada's absence from the list is somewhat conspicuous, especially after a prominent Las Vegas mortgage attorney estimated that the paperwork was done improperly for nine out of ten mortgages.
Here are the top five states with the most mortgage fraud by dollar amount, according to MortgageDaily.com: