Protecting Prime Victims in Sub-Prime Crisis by Peter Vallone Jr.
Protecting Prime Victims in Sub-Prime Crisis
June 13th, 2008
The sub-prime mortgage crisis has left many homes empty and has given the economy a bad limp. The debacle has awoken America to the potential for various scams and complications in the mortgage process, illustrating the consequences when greed trumps sound economic policy and oversight.
But this crisis has drawn attention primarily to problems associated with shady lenders or shortsighted borrowers. A great number of foreclosures have resulted from outright fraud. Scam artists have taken out thousands of mortgages on random properties, pocketed the money, and left the actual homeowner stuck with an enormous tab.
The Department of Treasury's Financial Crimes Enforcement Network reported that mortgage fraud complaints increased almost 400 percent from 2003 to 2006. The FBI has also seen its mortgage fraud casework increase over 235 percent and estimates financial losses to the mortgage industry for 2006 between $946 million and $4.2 billion
As with many scam artists, these vultures have a favorite target—the elderly. Senior citizens make perfect marks for these cons: They own their own homes; they often are not closely involved in their own finances; and sadly some have dementia or other mental health problems.
It is particularly upsetting because the seniors most vulnerable to this sort of abuse are the most likely to be unable to deal with the financial consequences. Housing prices are skyrocketing, as we all well know.
I have fielded phone calls from distraught seniors and their family members, faced with a bank breathing down their neck and no place to go.
Their stories, and countless like them, make me furious. As a former prosecutor, I want to throw the full force of the law at these dirty rotten scoundrels. In my research, however, I discovered that legal complications and budget cuts have hindered the prosecution of many mortgage fraud cases, especially against the elderly. To help eliminate these complications, I have introduced a package of resolutions calling on Albany to make it easier to put scam artists in their own government-financed homes in jail.
First, and perhaps most important, we need to change the larceny statute to include when thieves exert undue influence on the elderly people with mental incapacities. Many times, con artists trick seniors into legally signing over their property to another party. If a senior does not have the mental ability to testify to the contrary, it can be very difficult to prove the property was stolen and not a legitimate gift. Currently, lawyers are forced to argue using complicated case law to prove this point. My resolution would call on the state to codify this theory of larceny to better protect our seniors who suffer from mental infirmities.
Second, we need to make it easier for prosecutors to introduce evidence by eliminating several complications particular to the elderly. State law currently does not allow advanced age as a ground for conditional testimony of a witness, meaning seniors must be examined only at the time when their case is heard. As these cases can drag on for years, sometimes elderly witnesses fall ill or pass away before their case reaches a courtroom.
Also, current state law requires prosecutors to call a live witness in order to introduce certain business records and documents necessary in a fraud case, making the prosecution more difficult and time consuming. Budget cuts to district attorneys' offices are making it even more difficult to prosecute these complicated cases. Fraud cases have increased immensely, while the assistants needed to prosecute them have been in short supply. We must allow our prosecutors to do more with less, and give them the ability to introduce certified business records without a representative from the bank.
While politicians debate the ways to confront the larger mortgage crisis, there are simple steps we can take to prevent our seniors and others from becoming victims. I have introduced resolutions in the City Council that will call for quick action by Albany to close these legal oversights.
Our laws are powerless without the tools to enforce them, which can leave the vulnerable—in this case the elderly—at risk of exploitation. Our homes and our seniors are two of our most precious possessions. Let's protect them both.
Peter Vallone is a Democrat representing parts of Queens in the City Council.
But this crisis has drawn attention primarily to problems associated with shady lenders or shortsighted borrowers. A great number of foreclosures have resulted from outright fraud. Scam artists have taken out thousands of mortgages on random properties, pocketed the money, and left the actual homeowner stuck with an enormous tab.
The Department of Treasury's Financial Crimes Enforcement Network reported that mortgage fraud complaints increased almost 400 percent from 2003 to 2006. The FBI has also seen its mortgage fraud casework increase over 235 percent and estimates financial losses to the mortgage industry for 2006 between $946 million and $4.2 billion
As with many scam artists, these vultures have a favorite target—the elderly. Senior citizens make perfect marks for these cons: They own their own homes; they often are not closely involved in their own finances; and sadly some have dementia or other mental health problems.
It is particularly upsetting because the seniors most vulnerable to this sort of abuse are the most likely to be unable to deal with the financial consequences. Housing prices are skyrocketing, as we all well know.
I have fielded phone calls from distraught seniors and their family members, faced with a bank breathing down their neck and no place to go.
Their stories, and countless like them, make me furious. As a former prosecutor, I want to throw the full force of the law at these dirty rotten scoundrels. In my research, however, I discovered that legal complications and budget cuts have hindered the prosecution of many mortgage fraud cases, especially against the elderly. To help eliminate these complications, I have introduced a package of resolutions calling on Albany to make it easier to put scam artists in their own government-financed homes in jail.
First, and perhaps most important, we need to change the larceny statute to include when thieves exert undue influence on the elderly people with mental incapacities. Many times, con artists trick seniors into legally signing over their property to another party. If a senior does not have the mental ability to testify to the contrary, it can be very difficult to prove the property was stolen and not a legitimate gift. Currently, lawyers are forced to argue using complicated case law to prove this point. My resolution would call on the state to codify this theory of larceny to better protect our seniors who suffer from mental infirmities.
Second, we need to make it easier for prosecutors to introduce evidence by eliminating several complications particular to the elderly. State law currently does not allow advanced age as a ground for conditional testimony of a witness, meaning seniors must be examined only at the time when their case is heard. As these cases can drag on for years, sometimes elderly witnesses fall ill or pass away before their case reaches a courtroom.
Also, current state law requires prosecutors to call a live witness in order to introduce certain business records and documents necessary in a fraud case, making the prosecution more difficult and time consuming. Budget cuts to district attorneys' offices are making it even more difficult to prosecute these complicated cases. Fraud cases have increased immensely, while the assistants needed to prosecute them have been in short supply. We must allow our prosecutors to do more with less, and give them the ability to introduce certified business records without a representative from the bank.
While politicians debate the ways to confront the larger mortgage crisis, there are simple steps we can take to prevent our seniors and others from becoming victims. I have introduced resolutions in the City Council that will call for quick action by Albany to close these legal oversights.
Our laws are powerless without the tools to enforce them, which can leave the vulnerable—in this case the elderly—at risk of exploitation. Our homes and our seniors are two of our most precious possessions. Let's protect them both.
Peter Vallone is a Democrat representing parts of Queens in the City Council.
