President Obama issued an executive order on Tuesday creating a new financial fraud task force. The move follows reports that mortgage fraud and foreclosure scams are running rampant, sparked by the nation's economic decline and criminals' tendency to prey on despair. The task force is charged with investigating and prosecuting what the administration called "significant financial crimes." According to officials, mortgage, securities, and corporate fraud will be the focal points of the new unit.
The delinquency rate for commercial mortgage-backed securities (CMBS) predictably climbed again in October. The latest index from Fitch Ratings puts delinquencies in this secondary market sector at 3.86 percent, an increase of 28 basis points from the previous month. Moody's Investors Service places it even higher, at 4.01 percent. Hikes were recorded across all property types, with defaults in the hotel and office sectors leading the surge.
Mortgage loan delinquency increased for the 11th straight quarter, according to a study released by Chicago's TransUnion on Tuesday. With this increase, the ratio of borrowers 60 or more days past due hit an all-time national average high of 6.25 percent during the third quarter of 2009.
A jury last week ruled that Ralph R. Cioffi and Matthew M. Tannin, two former Bear Stearns hedge fund managers, were not guilty of fraud related to investments in risky subprime mortgage pools. Although Cioffi and Tannin were acquitted on the criminal charges, officials with the Securities and Exchange Commission (SEC) say they plan to pursue a civil case against the two executives, despite the federal court's ruling.
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