Companies Accused of Mortgage Fraud Give $21 MillionBy robertslaw, In White Collar Crimes, 0 Comments
Mortgage companies accused of fraud returned approximately $21 million to North Carolina consumers recently.
Four large mortgage companies, including WR Starkey Mortgage, Beazer Mortgage, Vanderbilt Mortgage and Countrywide Homes, are accused of utilizing inaccurate information to obtain loans for consumers or working with home dealers to inflate the prices of homes.
The Commissioner of Banks and the Attorney General’s office collaborated to collect $4.7 million from WR Starkey, $2.5 million from Beazer, $2.8 million from Vanderbilt and $11 million from Countrywide Homes. North Carolina Attorney General Roy Cooper called mortgage fraud investigations very labor intensive, due to the number of parties involved and the paperwork. He also noted that these types of problems are not easily detected.
Cooper blamed this type of fraud as a major contributor to the downfall of the housing market and stock market troubles in the United States.
One North Carolina consumer received a letter saying that her family would be receiving $26,000 from WR Starkey after she was promised a $900-a-month payment and ending up having to pay $1,300 each month. She was close to losing her home to foreclosure.
WR Starkey Mortgage is sending checks to 171 North Carolina families. Although the company does not admit or deny the mortgage fraud accusations against it, the new CEO of the company stated, “We never attempted to avoid our responsibilities, which is reflected in our rapid and significant settlement with the State authorities.”
The company blamed the “majority” of the fraud allegations on a few former employees and Phoenix Housing Group, a manufactured home sales company. Further, the company has implemented many changes: its president was removed, the past CEO resigned and an outside compliance watchdog was hired.
Source: WRAL.com “NC consumers get $21M after mortgage fraud accusations” 8/16/10