In creating a mortgage fraud strike force, Attorney General Kamala Harris has taken a big, if belated, step forward in writing the last chapter of California’s housing meltdown.
As we have chronicled in these pages during the past two years, the boom and bust in housing in our region and across the Golden State did not happen without help. Unscrupulous operators at mortgage processing giants robo-signed their way into practices that stretched credulity.
Then there is the outright fraud at firms such as Paso Robles-based Estate Financial, where the founders pled guilty to taking money from investors with no intention of making the real estate purchases that were expected. An investigation into that company is ongoing by court-appointed trustees in U.S. Bankruptcy Court.
And finally there is the ongoing federal investigation into mortgage fraud in Oxnard and elsewhere, where real estate agents and mortgage firms preyed on consumers with little or no knowledge of English to put them into homes they could not afford.
As a result, Sacramento, the Inland Empire and parts of Los Angeles remain among the least attractive markets for real estate investment among major cities across the nation.
Following the lead of counterparts in New York, Harris has created a 25-person strike force with offices in Los Angeles, Fresno, San Francisco and Sacramento.
With problems this large in a sector of the economy that has a broad impact on consumers, municipal finance and our quality of life, there is bound to be a hornet’s nest of activity that takes place outside the legal limits. We hope Harris proceeds aggressively to set the housing market back on legitimate footing.