With the problem of mortgage fraud exacerbating the current and ongoing housing crisis in America, the need for immediate solutions has come to the forefront both locally and nationally.

On Friday, April 23 at the Theodore Levin U.S. District Federal Courthouse in Detroit, a diverse group of panelists shared their insight on mortgage fraud-related problems within their communities with the Financial Fraud Enforcement Task Force, which co-hosted the event along with newly elected United States Attorney of the Eastern District of Michigan Barbara McQuade. The task force is comprised of notable leaders such as Kenneth Donohue, inspector general of the U.S. Department of Housing and Urban Development (HUD) and Sharon Ormsby, section chief of the financial crimes section of the FBI.

Detroit FBI Special Agent in Charge Andrew Arena said that metro Detroit has become a hotbed of fraud activity.

“This was a freight train coming right at us,” he said.

The Arab American News Publisher Osama Siblani was a panelist during the event and spoke about the problem as it relates to the Arab American community.

“This issue is very important, especially to our community and the real estate problem in Dearborn and the surrounding areas,” Siblani said.

“Right now, the laws are not helping, we’re making it too easy for the crooks.”

Siblani said that the importance of educating the community on the options for making mortgage payments can’t be overemphasized. Education can prevent people from finding themselves in tenuous situations, during which they might be tempted to commit mortgage fraud whether knowingly or unknowingly under the direction of a scam artist.

He and fellow Congress of Arab American Organizations (CAAO) leaders have met with U.S. Senator Carl Levin of Michigan as well as U.S Secretary of Commerce Gary Locke to discuss the foreclosure crisis in the past, bringing their concerns to the table.

“The problem is that the banks will not give a lower rate or re-finance a loan to someone who is trying to make their payments on time so they actually give incentives for people to default, which created a chain reaction that brought us to this current real estate market,” Siblani said.

Siblani said that the over-valuing of homes followed by the housing market’s nosedive created incentives for people to walk away because they didn’t know the laws surrounding the situation and how they could be helped.

The situation led to big problems for metro Detroit immigrants in particular, although he acknowledged that some of them committed the mortgage crimes on purpose.

“Because immigrants don’t understand the law, they sometimes fall into the traps of devious people giving them a way out that may not be legal.”

Several panelists agreed that one of the most troublesome new problems on the horizon is the presence of scam artists posing as companies that claim to help people re-finance their mortgages or help them find other ways out of home-related debt.

“I’ve heard from some people who’ve paid thousands of dollars up front only to never hear from that agency again,” said Director of Housing Opportunity Hector Hernandez of the Southwest Solutions organization in southwest Detroit.

“There’s not enough funding to inform people about how to handle their situations and by the time the misleading ads are out there, it’s challenging to stop them.”

Hernandez proposed a 90-day foreclosure moratorium in order to bring banks to the negotiating table in order to work out fair solutions for both parties.

Catherine Dandar, a certified residential real estate appraiser with the Rahm appraisal company, told the gathered officials that honest appraisals of house values are one of the biggest keys to stopping mortgage fraud in its tracks.

“It’s difficult to perpetrate mortgage fraud without appraisal fraud,” she said.

She detailed how many of those who committed mortgage fraud used the appraisal process to perpetrate their schemes.

“What happened was the appraisers intentionally overinflated or undervalued the homes allowing the fraud to be committed,” she said.

“The appraisers succumbed to outside pressure because they depended on the mortgage people and they had to do what they said in order to get more work from that company.”

Dandar said that HUD has stepped in to make sure appraisers are now certified and that the Home Evaluation Code of Conduct from May 2009 has given better security to the housing industry as a whole.

Siblani appealed to the committee for more grants and other resources to help inform the Arab American community about the housing situation and their options as homeowners.

“We have the community organizations and the media to get the word out, but we don’t have the connections or the funding yet.”

Wayne County Prosecutor Abed Hammoud also attended and thought the meeting was a positive step towards informing key decision-makers.

“The summit was very informative and it was good for all the stakeholders of mortgage fraud to get together and share information,” he said.

“I’m glad the Justice Department is making it one of their priorities because it has as big of an impact as violent crime and something must be done, especially in these difficult economic times.

“The impact on society has been great from what I’ve seen in my work.”

For more information about how to stop mortgage fraud, visit www.stopfraud.gov.