Published DateOSSIPEE — Carroll County's sheriff is rounding up a posse to investigate criminal mortgage fraud. Volunteers will be needed.
On Monday morning, Sheriff Christopher Conley (R-Wolfeboro) held a press conference to announce the creation of a task force to look at the impact of banking fraud on Carroll County. Volunteers should have knowledge of the mortgage or banking industries or an interest in those subjects.
Conley was motivated to create the task force after he learned 51 banking institutions filed for bankruptcy protection in federal court in May. He wondered if those bankruptcies might impact Carroll County residents. But there have been other issues that gave him concern as well. Conley said thousands of property owners in the county may be affected by mortgage fraud in general.
"During the past year, there have been many events, that have come to my attention or I have been involved with, affecting property owners — i.e. properties being foreclosed on that were owned outright, financial institutions that staked a claim to a property but didn't have a deed, note or mortgage history, persons who owned property and were told they were in arrears on a mortgage they paid," said Conley. "A common thread in each case is there was no accountability by the financial institution, no one to present a reply, no decision maker to speak with."
The Conway Daily Sun is aware of two such issues. In Effingham late last year, JP Morgan Chase and a company called Lender Processing Services wrongly claimed ownership of the Drew family's second home. The Drews found a notice on the home claiming that JP Morgan Chase owned the property. The home's locks were changed and about $14,000 worth of belongings were removed. The Drews eventually settled with the bank.
"That's another case where the mortgage, the title and the communication were not quite right," said Conley.
In March, JP Morgan and LPS had put a similar notice on the Rust family's home in Eaton. However, the notice was put on the wrong house. No belongings were removed from the Rust's home because the mistake was caught quickly.
By checking the county's Registry of Deeds, sheriff's Cpl. Brittany Perley confirmed there was no mortgage or lien on Rust's single-story home on Ridge Road.
"(The Rusts) said they felt they weren't making any headway at getting through to someone to ensure they (LPS and Chase) would not continue going to her house," wrote Perley in her police report. "At this point they felt it was unstoppable and when the process continued they would be forced to sue the bank."
Perley said people living in neighborhoods with a lot of second homes need to be especially vigilant because the second-home owners might not know about notices that are posted on their properties.
"It's good the neighbor saw it," said Perley about the notice on Rust's door. "Otherwise we would have ended up like we did in Effingham."
JP Morgan has publicly apologized for the errors in Effingham and Eaton.
The sheriff listed several indicators that increase the likelihood that a property could be subjected to fraud, including: The property was purchased or financed or refinanced after January of 1997, the property was purchased or financed refinanced after January 1997 and the mortgage servicer (who you direct payments to) has changed, inaccurate inquiries from financial institutions relative to your mortgage and the bottom page on your mortgage has the following statement, "New Hampshire Mortgage -single family -Fannie Mae/Freddie Mac Uniform Instrument MERS modified form 3030 01/01."
Conley believes Carroll County will be a good place to look at how big a problem mortgage fraud actually is because it has a small population. It's unclear how many county residents are actually victims of "complex and convoluted" mortgage frauds.
"We don't know what we don't know," said Conley.
In New Hampshire, mortgage fraud is prosecuted by the Attorney General's Office. Conley said the jurisdiction is shared and that he hasn't spoken to the Attorney General's Office about his task force.Conley also said the issue of banking fraud is of "great concern" in Grafton County.
Earlier this year, the State of New Hampshire joined with 48 other states and the federal government in a settlement with the nation's five largest banks and mortgage servicers for "foreclosure abuse, fraud and unacceptable nationwide mortgage servicing practices," according to the Attorney General's Office.
"The proposed agreement provides an estimated $43.6 million in direct relief to New Hampshire homeowners and addresses future mortgage loan servicing practices," states the New Hampshire Attorney General's Office.
Critics of the settlement, like investigative journalist Matt Taibbi of the Rolling Stone, panned the settlement as so inadequate that it could be considered a bailout.
The Attorney General Office lawyer in charge of mortgage fraud, Rob Adams, was on vacation this week and could not be reached.
Conley isn't worried about setting off a turf war with the state of New Hampshire.
"It comes down to if not you, then who? And if not now then when?" said Conley.
Jurisdictions around the country are going after the banks, said Conley. He said Louisiana parishes are suing banks for damages under Racketeer Influenced and Corrupt Organizations laws and that the same banks are operating in Carroll County. Maryland's Attorney General is seeking damages for the destruction of the reliability of public records, deeds and titles.
Anyone making a complaint should have the following information available: legal name of property owner (borrowers) physical addresses of the property and description, mailing address of the property and borrowers, a description of the problem and a contact e-mail.
This is an election year and two other candidates will be vying for Conley's office in November.
Republican candidate Domenic Richardi said whether or not he would continue Conley's program depends on what exactly Conley does. Richardi indicated that a lot of the work could be done in house as opposed to with a group of volunteers.
The other candidate, Francis Lord, an Independent, couldn't be reached.
Investment advisor Anthony Cloutier, of Freedom, said he's glad that a law enforcement agency is looking at the issue. Cloutier has a television show about finance, called Main Street Money, which is aired on Valley Vision.
"They should be concerned about this in Concord, and this may be the only way to get their attention," said Cloutier.