Obama Administration Makes Massive Arrests for Mortgage Fraud

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Massive mortgage fraud scheme leads to arrest

Federal officials this week announced that they've made 485 arrests and seized almost $11 million in assets in the largest mortgage fraud crackdown in U.S. history. "Operation Stolen Dreams" has been an effort that spans across multiple agencies and has netted 336 convictions, since it began on March 1st, according to the Justice Department.

The schemes involved more than 1,215 defendants and $2.3 billion in losses.

"Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible angle is vital," Attorney General Eric Holder said in a statement.

According to the FBI, there are more than 67,000 reported cases of mortgage fraud each year, resulting in $4 to $6 billion in annual losses. The bureau has 77 working groups focusing on mortgage fraud cases, and the number of cases seems to be growing. For example, there were 1,571 new cases of mortgage fraud opened in 2009, compared with 136 cases for all of 2004. The states that lead the nation in mortgage fraud surprisingly are Rhode Island, Florida and Illinois.

African Americans are disproportionately victimized by mortgage fraud, in large part because they are most likely to be granted predatory loans or deal with non-traditional mortgage-financing companies. This is part of the reason that I've had people closely monitoring the interesting "partnership" between the NAACP and Wells Fargo. Organizations like the NAACP can be the last line of defense for people of color, which is why it is important that we remain in a position to be vigilant.


Dr. Boyce Watkins is the founder of the Your Black World Coalition and the author of the new book, "Black American Money." To have Dr. Boyce commentary delivered to your email, please click here.

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