Mortgage mess

Saturday, November 22, 2008
The mortgage crisis that has hit the U.S. has generated plenty of national headlines in recent months, but the financial finagling has stretched all the way from Seattle-based Washington Mutual, one of the biggest lenders hit the hardest, to Southeast Missouri, according to charges filed by federal prosecutors earlier this month.

Two men are accused of illegally inflating the appraised values of low-cost houses in Sikeston and using the fake figures to get huge loans for investors. Prosecutors claim the two men pocketed nearly half a million dollars from their scheme.

Catherine Hanaway, U.S. attorney for the eastern district of Missouri, has organized a task force to focus on education, prosecution and giving victims of mortgage fraud a voice in court proceedings. The task force includes the FBI, IRS, U.S. Postal Service, HUD, state agencies and lenders, along with real estate groups and law enforcement agencies.

It's bad enough to face foreclosure because of the easy credit that led to the current housing crisis, but it's even worse to discover loans may have been made fraudulently -- and at great cost to borrowers, lenders and taxpayers.