This editorial appeared in the Charlotte Observer.
The events playing out in a Charlotte courtroom this week spotlight the need to tackle another part of the Obama administration's financial rescue plan – ensuring there are effective and enforced rules to prevent mortgage fraud.
A federal indictment last spring alleged numerous mortgage fraud schemes in the Charlotte area involving appraisers, lawyers, mortgage brokers, builders and investors and at least $15 million in loans on 270 properties. The indictment charged six people and listed others as unindicted co-conspirators. Five pleaded guilty.
The sixth, lawyer Victoria Sprouse, went on trial Monday, charged with bank and mail fraud, money laundering and perjury – as part of a scheme involving all six. Sprouse's lawyers say she unknowingly became entangled in the fraud.
Her involvement will be left to a jury to decide. But the impact of such fraud on the economic crisis is clear. It aided and abetted the mortgage catastrophe, spawning a multitude of foreclosures that rippled through the banking meltdown. As of last summer, at least 1,400 mortgage fraud cases were being probed nationwide.
To read the complete editorial, visit The Charlotte Observer.