Mortgage fraud bill passes as FBI’s local investigation moves forward

The House of Representatives on Thursday truly agreed and passed SCS HCS House Bill 2188, sponsored by Rep. David Pearce, according to a Blunt news release.

The bill:

• Gives the Real Estate Commission and Real Estate Appraisers Commission power to suspend or revoke licenses for mortgage fraud;

• Allows civil penalties up to $2,500 per violation;

• Makes mortgage fraud a class C felony;

• Enhances consumer protection laws to help Missourians avoid scams; and

• Provides the Division of Finance commissioner power to prohibit offenders from doing real estate lending in Missouri.

The FBI reports that it was actively investigating 1,338 cases of alleged mortgage fraud nationally as of March, according to www.fbi.gov, and in Springfield, investigators are hot on the tails of some local offenders. An extensive probe that gained momentum in early 2007 has turned up evidence that individuals conspired to defraud lenders by inflating the value of area homes, according to Supervisory Special Agent Dean C. Bryant, the FBI’s top Springfield agent.

“I will tell you that some of the cases certainly involve tens of millions of dollars,” Bryant told Springfield Business Journal. “So there’s a lot of money involved, and we’re aggressively pursuing the investigations – obviously, because of the heartache and stress it’s put on all these homeowners.”

Bryant said he expects local investigations to result in federal indictments this year.

See SBJ’s May 5 cover story for more on the latest in the FBI’s investigation into mortgage fraud in Springfield, including the most popular schemes and the lasting effect they could have on the local real estate market. Click here for a look back at SBJ’s past coverage of mortgage fraud in the Ozarks.

SBJ.net Poll

The FBI continues to investigate mortgage fraud in Springfield, with the possibility of indictments this year. When all is said and done, what do you think will be the most significant consequence?

Vote at sbj.net/poll.