The California Attorney General announced yesterday that the state has a new Mortgage Fraud Taskforce. This team, comprised of lawyers and investigators from the California Department of Justice, will investigate and prosecute those suspected of predatory lending practices and other fraudulent mortgage-related practices. Mayor Villaraigosa praised this program, stating that the Task Force “is certain to help thousands of residents and families from being victimized by instituting the critical law enforcement component to help stop the practice of predatory lending once and for all.”
California predatory lending schemes have been on the rise since our economy began to decline. This type of fraud takes advantage of unsuspecting borrowers and wreaks havoc on distressed homeowners and lending institutions alike. Predatory lenders “prey” on unsophisticated buyers, convincing them to accept unjustifiable and unreasonable loan/refinance terms, which they ultimately cannot afford to repay.
Engaging in acts of predatory lending subjects you to state and federal prosecution under a number of different laws including (but not limited to): grand theft, forgery, and conspiracy. A conviction for this offense triggers prison time, substantial fines, and professional discipline.