CHICAGO — Mortgage fraud in the Midwest has gotten so bad that the U.S. Department of Housing and Urban Development’s watchdog had to break up the region.
HUD’s Office of Inspector General has divided the Midwest region into two, Barry McLaughlin, special agent in charge of the inspector general’s Midwest Region, told MortgageDaily.com after a panel session at the Mortgage Bankers Association’s National Fraud Issues Conference 2010 this week in Chicago.
The inspector general ensures that HUD operates efficiently and with integrity. It sometimes seeks administrative sanctions, civil recoveries or criminal prosecution of parties who are responsible for waste, fraud and abuse in HUD programs and operations.
McLaughlin noted that the split was the result of growing mortgage fraud in its Midwest region.
Michigan and Ohio have been pulled from Region 5 to form Region 15, he said. The two states have seen a significant “volume of fraud.”
The office “felt it was better to create their own region to better address the problems there,”” McLaughlin explained.
Illinois, Indiana and Wisconsin remain in Region 5