Mortgage fraud serious, panel agrees
John Rebchook, Rocky Mountain News
Thursday, November 2, 2006
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A panel that included an FBI agent, appraisers, a national lobby group and other experts on Wednesday hosted an all-day seminar to discuss the growing problem of mortgage fraud.
"Mortgage fraud has reached epidemic proportions," said Ivor J. Hill, owner of Pueblo-based I.J. Hill Appraisal Services.
Hill organized the seminar on behalf of the Colorado Association of Realtors.
FBI agent Dan Bradley said "everyone is a victim" in white-collar crimes such as mortgage fraud.
Bradley's office is investigating dozens of cases. He said the FBI does everything from following paper trails to using undercover agents and hidden cameras.
In many cases of mortgage fraud, appraisers, mortgage brokers and real estate agents work together, said Lou Garone, who reviews appraisals for Aurora Loan Services, a Lehman Brothers company. Often, they work with an investor who gets a loan for far more than the market value of the house and then lets the home go into foreclosure.
Denver attorney John Head, along with several Realtors and brokers in the audience, said the state isn't doing enough to crack down on mortgage fraud. James Spray of America's Mortgage LLC said bringing cases of mortgage fraud to the attorney general's office "is like complaining to a black hole."
The state is making mortgage fraud a high priority, although with four attorneys and two investigators trying to handle 50,000 consumer complaints annually, it doesn't have the resources it needs, Deputy Attorney General Jan Zavislan said.
Sonja Leonard Leonard, owner of Leonard Leonard & Associates, said that in one case, a Denver home was purchased for $1.3 million in December, listed for $2.25 million in April, and the price was lowered to $2.15 million in June. Then in August, it was placed under contract for $3.1 million.
In another recent case, she said, a client was listing a home at $499,000 and an investor group offered $625,000. When Leonard Leonard suspected a scam and turned it down, she said the investor threatened her with a "drive-by shooting."
rebchookj@RockyMountainNews.com or 303-954-5207
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