The U.S. Department of Justice is charging hundreds of people following a year-long investigation of mortgage fraud cases across the country, including “loan modification” scams that often try to recruit unwitting Notaries as accomplices.
The Distressed Homeowner Initiative conducted by the Federal Bureau of Investigation from October 2011 to September 2012, targeted people preying on homeowners. These scams included con artists who tricked homeowners into transferring their home title to accomplices claiming this would prevent foreclosure, or perpetrators of loan modification schemes who falsely claimed they would re-negotiate mortgage terms for large fees. Some mortgage scammers have tried to dupe Notaries into working for them in an effort to appear more legitimate to distressed homeowners.
The investigations led to charges against 530 criminal defendants in cases involving more than 73,000 homeowner victims and losses estimated at more than $1 billion, according to a Department of Justice October 9 statement.
Officials and state bar associations have warned Notaries not to accept jobs asking them to collect advance fees for loan modifications — a practice prohibited in several states. Another warning sign is being told not to leave a borrower any copies of documents signed or notarized for the loan modification.
David Thun is an Associate Editor at the National Notary Association.