Kansas City: NovaStar agrees to settle securities-fraud class action for $7.25M

From Kansas City Business Journal:

NovaStar Financial Inc. has agreed to pay $7.25 million to settle a class-action securities-fraud lawsuit that originated in April 2004.

Novastar's insurance has agreed to pay the settlement; however, is it really the insurance company's responsibility to do so? Even though they don't have an admission of wrong doing, that doesn't mean that wrong doing didn't take place. I think a bigger investigation is in order for the company--and the people who work and do business with Novastar deserve answers.

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Mortgage Fraud up by 42%

In a report from Mortgage Asset Research Institute (MARI), as announced in this article, mentioned that “incidents of mortgage fraud in the U.S. increased by 42 percent in the first quarter of 2008” year over year. The two states with the highest incidents remained Florida, and California. The most common type of case filed include: General Application Misrepresentation, Income Misrepresentation, and Employment Misrepresentation. The statement released by MARI, regarding their recent report stated:

"The mortgage industry is currently in a volatile state, as many constituents try to protect themselves from criminals who continue to use these turbulent times as an opportunity to commit new fraud and inflict additional financial damage for our nation's lenders."

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