With foreclosures, housing vacancies, and mortgage fraud at all-time highs,
it's no secret that the residential real estate sector is struggling. These
intertwined problems are threatening the stability of entire neighborhoods,
making the search for effective responses crucial. As part of this search, the Bureau of
Justice Assistance brought together experts from around the country to
examine possible solutions to these challenges. As a document of their
conversation, the Justice Department's
Office of Justice Programs released a report Friday outlining the various
strategies that were discussed. The report, A Full Response to an Empty House: Public Safety Strategies for
Addressing
Mortgage Fraud and the Foreclosure Crisis, is intended to serve as a guide
to government and law enforcement officials across the U.S. who are seeking
to addresses these growing issues in their own communities. A theme running through all of the innovative responses to mortgage fraud,
foreclosures, and vacant properties was collaboration. Task forces,
inspection teams, and training initiatives all require collaboration among
different agencies, public and private entities, and even different
industries, the report said. Participants also agreed that it is important to invest in prevention by
creating public awareness about mortgage fraud, educating potential
investors about the laws and regulations pertaining to property ownership,
and warning homeowners who are facing foreclosure of the existence and
prevalence of foreclosure rescue scams. While the value of prevention was emphasized, participants didn't rule out
prosecution, particularly in cases of mortgage fraud. For prosecutors to
succeed, however, they need to understand the ins and outs of mortgage
fraud, the report said. As for housing vacancies, participants said it is vital to vigorously
enforce the housing code and redevelop vacant properties. According to the
report, securing and maintaining abandoned housing is the baseline, and the
next step is returning the property to productive use. Finally, participants said it is vital to advocate for new legislation.
Several cited the need for legislation on a national level, including laws
allowing the sharing of information that, under current law, is deemed
confidential. "A real serious problem is that a lot of the laws that were designed to
protect consumer privacy give cover to the bad guys because they know banks
can't talk to each other," one participant said. "We need to figure out a
way to let banks talk to each other about bad actors . . . They need to have
an explicit protection for doing that."Others called for federal legislation to help improve the timeliness of
information reported to the three national consumer reporting agencies to
prevent scammers, like those involved in mortgage fraud, from exploiting
"the gap in time that occurs between when a loan is made and when it appears
on a credit report."In addition to outlining strategies, participants also highlighted
challenges. One challenge everyone shared was the difficulty of identifying
property owners. This was due to the circuitous path mortgages have taken in
recent years, morphing from loans generated and retained by local banks to
financial instruments that are bundled and sold to investors around the
world. Another shared challenge was the cost of doing business. The recession that
launched the housing crisis has also pinched law enforcement budgets. Thus,
just as governments are called upon to respond to a rising number of vacant
properties, they are less equipped to do so. Given that, collaboration
becomes even more important, the report said. In their final analysis, participants shared a sense of the possible,
concluding that with creativity, knowledge, and determination law
enforcement agencies can respond effectively to mortgage fraud and the
foreclosure crisis, helping their neighborhoods weather the storm by
adapting the strategies that best suit their resources and local needs.
it's no secret that the residential real estate sector is struggling. These
intertwined problems are threatening the stability of entire neighborhoods,
making the search for effective responses crucial. As part of this search, the Bureau of
Justice Assistance brought together experts from around the country to
examine possible solutions to these challenges. As a document of their
conversation, the Justice Department's
Office of Justice Programs released a report Friday outlining the various
strategies that were discussed. The report, A Full Response to an Empty House: Public Safety Strategies for
Addressing
Mortgage Fraud and the Foreclosure Crisis, is intended to serve as a guide
to government and law enforcement officials across the U.S. who are seeking
to addresses these growing issues in their own communities. A theme running through all of the innovative responses to mortgage fraud,
foreclosures, and vacant properties was collaboration. Task forces,
inspection teams, and training initiatives all require collaboration among
different agencies, public and private entities, and even different
industries, the report said. Participants also agreed that it is important to invest in prevention by
creating public awareness about mortgage fraud, educating potential
investors about the laws and regulations pertaining to property ownership,
and warning homeowners who are facing foreclosure of the existence and
prevalence of foreclosure rescue scams. While the value of prevention was emphasized, participants didn't rule out
prosecution, particularly in cases of mortgage fraud. For prosecutors to
succeed, however, they need to understand the ins and outs of mortgage
fraud, the report said. As for housing vacancies, participants said it is vital to vigorously
enforce the housing code and redevelop vacant properties. According to the
report, securing and maintaining abandoned housing is the baseline, and the
next step is returning the property to productive use. Finally, participants said it is vital to advocate for new legislation.
Several cited the need for legislation on a national level, including laws
allowing the sharing of information that, under current law, is deemed
confidential. "A real serious problem is that a lot of the laws that were designed to
protect consumer privacy give cover to the bad guys because they know banks
can't talk to each other," one participant said. "We need to figure out a
way to let banks talk to each other about bad actors . . . They need to have
an explicit protection for doing that."Others called for federal legislation to help improve the timeliness of
information reported to the three national consumer reporting agencies to
prevent scammers, like those involved in mortgage fraud, from exploiting
"the gap in time that occurs between when a loan is made and when it appears
on a credit report."In addition to outlining strategies, participants also highlighted
challenges. One challenge everyone shared was the difficulty of identifying
property owners. This was due to the circuitous path mortgages have taken in
recent years, morphing from loans generated and retained by local banks to
financial instruments that are bundled and sold to investors around the
world. Another shared challenge was the cost of doing business. The recession that
launched the housing crisis has also pinched law enforcement budgets. Thus,
just as governments are called upon to respond to a rising number of vacant
properties, they are less equipped to do so. Given that, collaboration
becomes even more important, the report said. In their final analysis, participants shared a sense of the possible,
concluding that with creativity, knowledge, and determination law
enforcement agencies can respond effectively to mortgage fraud and the
foreclosure crisis, helping their neighborhoods weather the storm by
adapting the strategies that best suit their resources and local needs.
via Ping.fm
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