Punish newer fraud along with with older cases

The U.S. Attorney's Office in Arizona handles a wide variety of cases, ranging from violent federal crimes to immigration cases to bribery. But Arizona's new U.S. Attorney Dennis Burke singled out mortgage fraud as one of his office's more important issues during a recent visit to Yuma.

This reflects the fact that Arizona, and in particular the Phoenix area, has been at the center of the mortgage loan crisis which has helped feed the nation's current deep economic woes. Our state has been a leader in home foreclosures, and part of the reason is fraudulent lending practices.

Burke noted that lenient lending opened the door for criminals to commit fraud, with the banks and homeowners and perhaps ultimately the taxpayers being victimized.

One popular scheme involved overvaluing a home, with the cooperation of dishonest appraisers, and getting homebuyers to pay more money than the house was worth. "They would then pocket the difference and disappear," Burke said.

Some of these crimes occurred many months ago, during the height of the "go-go" home market, but the actual prosecution is only now beginning. He said the cases are typically complex and time-consuming, but it is important to go after the criminals to send the message that they cannot get away with defrauding people of their money.

While that is true, mortgage fraud is a moving target. While these older cases are being prosecuted, it is important not to forget that the criminals are finding new ways to take advantage of people, especially those who are facing foreclosure.

The fraudsters will offer to help homeowners fearful of losing their home in return for a fee. Then they pocket the fee and disappear, perhaps victimizing the homeowner for a second time.

It is important to deal not only with the past but also the present so these new forms of fraud can be headed off before they become prevalent.