Fraud in the housing markets is one of the problems that led to the economic crisis, and now that the administration is getting its housing plan off the ground, it is taking steps to prevent criminals from undermining that as well. Today, a high-wattage press conference with AG Eric Holder, Treasury Secretary Tim Geithner, HUD Secretary Shaun Donovan, Federal Trade Commission Chairman Jon Liebowitz and Illinois Attorney General Lisa Madigan announced a number of initiatives to help protect consumers seeking to participate in foreclosure-prevention programs.
On the demand end, they're reaching out to potential participants with information about avoiding fraud and plastering the initiative's website with warnings that no fees should be paid to anyone (see this post's headline for the gist). On the supply side, Treasury's Financial Crimes Enforcement Network (FinCen, apparently), along with the FTC and DOJ, are monitoring for fraudulent advertisements and have identified 71 suspicious companies for warning and possible investigation; state-level officials have launched 150 civil actions against fraudulent mortgage modifiers in the past year. It's not clear at all if the scope of this anti-fraud campaign is wide enough to offer real enforcement of the law, but it's good to see that major agencies are cognizant of this problem and working together to attack it in a more high-profile way than has been seen in recent memory.
-- Tim Fernholz
