AUSTIN -- Texas Attorney General Greg Abbott has enacted a key section
of state legislation enacted last year aimed at cutting down on
Abbott announced Sept. 5 he'd convened the Texas Residential
Mortgage Fraud Task Force to improve collaboration between the state's
regulators and law enforcers. The Task Force will include regulators
from the banking, credit and real estate sectors.
Abbott's statement came the same day Connecticut Attorney General
Richard Blumenthal announced he was suing six participants in what he
called a "vast predatory lending scheme". The charges there reflect
similar 'mortgage fraud' cases in Texas and elsewhere this year.
The Lone Star state's Task Force emerged in January under House Bill
716, authored by Republican Rep. Burt Solomons of Carrollton, who
chairs the House Commitee on Financial Institutions, and Sen. Kip
Averitt of Waco. Averitt said the Task Force aims to "better track and
prosecute mortgage fraud and its perpetrators."
Solomons said in a statement January 30 that HB716 aims "to protect
consumers and legitimate lenders in the mortgage loan process from
HB716 also granted the attorney general concurrent jurisdiction with
local DAs to prosecute criminal mortgage fraud cases effective
September 1. These include cases involving money laundering, loan
document falsification, and mail or wire fraud.
As well as the attorney general, the Task Force will include the
commissioners of consumer credit, banking, Credit Unions, insurance,
and savings and mortgage lending. The Texas Real Estate Commission and
Texas Appraiser Licensing and Certification Board will also be
Blumenthal's Connecticut suit alleges the participants, including
mortgage lenders and a property agent, of swindling "dozens" of
low-income homebuyers in the New London area. He accuses the
defendants of inflating the prices of property they owned and then
persuading the buyers to take out mortgages they couldn't afford.
"This case is only the beginning of a challenging time in the real
estate and lending industry," Blumenthal's announcement noted somewhat