California creating mortgage fraud task force

California creating mortgage fraud task force
The team of 17 lawyers and eight special agents from the state Department of Justice will pursue corporate fraud, scams and fraudulent lending practices, Atty. Gen. Kamala Harris says.

By Alejandro Lazo, Los Angeles Times
May 23, 2011, 12:02 a.m.

California Atty. Gen. Kamala Harris, saying that years of unscrupulous lending still haunts the state, is creating a 25-person task force to target mortgage fraud of any size — from small operations that preyed on troubled borrowers to corporations that sold risky loans as safe investments.

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"We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state," Harris said, referring to the decline in homeowner equity. "There is a direct connection" between mortgage fraud "and the issue that we are challenged with in terms of our state budget crisis."

Creation of the state's Mortgage Fraud Strike Force, which Harris will announce at a news conference Monday in Los Angeles with Mayor Antonio Villaraigosa, comes as other states turn up the heat on the lending industry.

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