Even though the foreclosure crisis has waned and it looks like the housing market is on the road to recovery, banks and other lenders continue to scam consumers out of funds they could be using to make their mortgage payments and to pay their monthly bills. A recent article in DSNews.com explained that the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) has been working harder than ever “on eradicating foreclosure fraud.” Two recent examples—one involving a California man who had been operating a foreclosure rescue scam, and another involving Fifth Third Bank—make clear that SIGTARP means business.
If you believe you may have been the victim of a foreclosure rescue scam, it’s important to speak to an experienced Illinois consumer law attorney. At the Emerson Law Firm, we have experience handling consumer matters and have intricate knowledge of the laws surrounding foreclosure. Don’t hesitate to contact us.
What is SIGTARP?
SIGTARP’s website explains that the office is “a sophisticated, white-collar law enforcement agency.” Congress established it back in 2008 with an eye toward preventing consumer fraud linked to the struggling housing market and to the “$700 billion Troubled Asset Relief Program.” In short, SIGTARP is a watchdog, and it’s intended to promote economic stability by holding those who commit fraud accountable for their actions.
SIGTARP’s Aims and Homeowner Protection
What is SIGTARP doing to prevent fraudulent acts that ultimately affect consumers? According to the article in DSNews.com, an early December arrest, based on information collected by SIGTARP, will put an end to a foreclosure rescue scam in California. According to the report, Walter Bruce Harrell, a 72-year-old scammer, received a 10-month federal prison sentence to be followed by three years of supervised release after his conviction for bankruptcy fraud. How did he commit fraud, exactly?
In short, Harrell “operated a scheme in which he offered to postpone foreclosure proceedings on the homeowner’s property in exchange for a monthly fee.” In a financial climate in which many homeowners continue to struggle with mortgage payments and monthly bills, Harrell took advantage of consumers. The reported indicated that Harrell instructed homeowners “to deed fractional interests in their properties to other individuals whom Harrell would pay to file bankruptcy petitions in court.” When those bankruptcy petitions got filed, “Harrell would notify creditors—which included multiple TARP banks—seeking foreclosure on his clients’ properties, that the properties were part of an active bankruptcy proceeding.” Certain provisions of the U.S. bankruptcy code then prevented lenders from moving forward with foreclosure proceedings.
While SIGTARP’s primary interest in the case involved the additional costs that creditors incurred while Harrell held up the foreclosure process on all these properties, the watchdog’s role ultimately benefits consumers and homeowners. According to Christy Romero, the Special Inspector General, Harrell’s sentence “makes it clear that foreclosure rescue schemes will not be tolerated and can result in time in federal prison.”
Harrell’s case isn’t only one currently associated with SIGTARP’s crackdown. A day after news came down about Harrell’s sentence, a SIGTARP press release reported that the office had charged Fifth Third Bank and its former chief financial officer with “improper accounting of commercial real estate loans in the midst of the financial crisis.” According to the press release, the bank agreed to a $6.5 million settlement, while the chief financial officer agreed to a $100,000 penalty and to a suspension from most forms of financial employment.
Have you been the victim of a foreclosure rescue scam or a bad lending practice? You may be eligible for compensation. Contact the dedicated Illinois real estate attorneys at the Emerson Law Firm today to discuss your case.
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