Home foreclosures in Fort Lauderdale increased to record levels over the past years in part because of fraudulent mortgage loans, based on reports from government lawyers and from the Financial Crimes Enforcement Network.
According to the FinCEN report, the Fort Lauderdale-Miami metro area has the highest number of suspects who carried out mortgage fraud since 2007. Additionally, Florida has the second-highest number of suspicious mortgage activity reports in the country, behind only California.
Despite a slowdown in Florida home foreclosures in January this year, the total number of households affected was still high and Florida was still among the four most foreclosure-battered states in the country. Over 47,000 homeowners received distressed notices in January and 6,169 of them have already seen their properties turn into real estate foreclosure homes.
Recently, the federal Financial Fraud Enforcement Task Force, which was created by President Barack Obama in November, held a summit in Miami to meet with representatives from the law enforcement, mortgage, banking and real estate sectors to talk about fraudulent activities in the region. Mortgage fraud in the Miami-Fort Lauderdale metro area has been exacerbating home foreclosures in Fort Lauderdale and in other parts of the South Florida region.
According to the Federal Bureau of Investigation, 282 residents of South Florida have been indicted for mortgage fraud since September 2007 involving over $343 million in fraudulent home loans. Nationwide, over 2,900 fraudulent mortgage cases are being investigated by the FBI, a sharp increase from the 430 cases filed in 2003.
Last year, six residents of South Florida, together with three other people outside of Florida, were charged with carrying out an elaborate money-making scheme involving fraudulent home loans.
In February this year, 10 residents of Miami-Dade County were indicted for defrauding mortgage lenders in a $24-million scheme involving six huge mortgage loans.
Last December, 15 South Florida residents were charged with another multimillion-dollar fraudulent scheme involving home loans.
Based on a report from fraud prevention firm Interthinx, Florida ranked fourth among states in number of mortgage cases filed. The firm analyzes mortgage fraud and three other types of fraud nationwide.
Jeffrey Sloman, federal attorney for South Florida, said that mortgage fraud has caused lenders to post huge losses and homeowners to lose their homes.
Home foreclosures in Fort Lauderdale soared in 2009 by nearly 44 percent from the level of foreclosures in 2008, putting almost 173,000 housing units in the Fort Lauderdale-Miami area into the foreclosure process.
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