Southern California Legal Services Firm Establishes Mortgage Fraud Unit

The use of civil lawsuits by private and legal services attorneys representing mortgage fraud victims as a first step to bringing criminal complaints to local district attorney's offices may be taking hold in California. In Southern California, the Daily Bulletin reports:

• "Attorneys at Inland Counties Legal Services, a nonprofit organization, have been rummaging through the financial paperwork of mortgage fraud victims for the past seven months. The organization opened a mortgage fraud unit in February throughout their six offices in the two-county [San Bernardino and Riverside] area. [...] ICLS attorneys in San Bernardino and Rancho Cucamonga said they are seeing a steady increase in mortgage fraud investigations at their offices."

• "The District Attorney's office would normally handle these cases. However, there's a limited amount of time and only a handful of real-estate fraud investigators are available to see if investigations are eligible for prosecution, according to Larry Roberts, lead deputy district attorney in the real-estate fraud prosecution unit."

• "While mortgage fraud investigations are in their infancy, one thing is for sure - ICLS attorneys said they know the rise in referrals is just the beginning of more to come. Some would even say a tidal wave is on the horizon. 'We're going to be seeing a lot of these cases,' said Cass Watters, managing attorney for ICLS in Rancho Cucamonga. 'Hopefully, once we have a demonstrable number of cases, then we can get the DAs involved.' Or in some cases, the FBI, she said."

• " 'They're not interested in Joe Schmo down the street who frauded one person in a predatory scam,' Watters said of local, state, and federal law enforcement officials. 'They're looking for people who set up businesses and do it.' "

For more, see Fraud from housing boom becoming apparent.

For another story involving a criminal case being filed after a civil lawsuit was brought against a wrongdoer, see California Foreclosure Rescue Operator Faces Felony Charges.