A mortgage fraud task force is being created by the federal authorities in Connecticut to investigate schemes that contributed to the economic crisis and emerging crime trends associated with the growing tide of foreclosures.

There have been several mortgage fraud cases in the past year that have been brought in the notice of federal and state law enforcement agencies. Authorities said the task force would help coordinate those efforts.

Mortgage fraud hurts everybody, and the public should also help to bring mortgage fraudsters to justice, as they have reaped a large amount of money and helped to create the state’s and our nation’s current housing and credit problems.

The task force includes the U.S. attorney’s office, FBI and other state and federal agencies. Acting U.S. Attorney Nora R. Dannehy said mortgage fraud investigations are a key component of the office’s efforts to fight economic crime. Most of the mortgage fraud cases involve false representations on mortgage loan applications and inflated property appraisals. The new task force will focus on "foreclosure rescue" schemes and "short sale" schemes.

Foreclosure rescue schemes especially try to target desperate homeowners by persuading them to give the responsibility of their homes to a "specialist" who promises homeowners that they can stay in their homes, make "rent" payments and eventually repurchase the homes. But Instead of passing along the rent payments to a mortgage company, the "specialist" illegally retains the payments along with extra fees and the homes continue into foreclosure and the homeowners suffer additional losses.

In a short sale scheme, a buyer purchases a home with no intention of making payments and often keeps additional money included in the purchase loan that was supposed to go for improvements. After a few months, the buyer informs the lender that the house will foreclose and presents the lender a possible pre-foreclosure buyer who, unknown to the lender, is part of the fraud scheme and offers to purchase the home at a price below the current loan amount.

Hopefully the new task force will be able to combat such frauds and free us from the traps of such dishonest firms.

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