Comments on: Mortgage Fraud Part 1

By: Daniel Mulvehill

Daniel Mulvehill — Sat, 27 Feb 2010 17:00:37 +0000

Fraud is definately an “intentional misrepresenation ” of facts to gain financial ground. This case exploits unprofessional people who take advantage of a system that is proven within the mortgage profession to be most of the time a majority proven tracking system? Some people think because it is very simple that no one will figure out there analytical brainless way of cheating the system and when it works once here we go with mulitple temptations the will lead to there demise, SORRY we have choices and some take the low road home costing all of us effectively to have to do more than is needed, that’s Ok if youcan do it correctly?

By: Alison Clark

Alison Clark — Tue, 23 Feb 2010 22:03:12 +0000

I believe that most of the fraudulent practices, Lenders and Loan Originators have been taken care of with our stricter guidelines the HVCC and other loan documentation regulations. The programs that formerly made fraud easy have gone away. but I also believe with our current economic crisis this will change and a new type of criminal may rear its ugly head in our industry if it hasn’t already, criminals always seem to find a new way.
Unfortunately there are self employed consumers who I know are honest with their income on their tax returns and qualified for loans out there previously because the PI was so low that deserve to get out of these horrible loans and have no recourse, as their income has decreased over the past two years. I feel sad for the innocent people affected by all the bad loans that were previously offered unscrupulously by the large investors who pushed on small brokerages to sell them.

By: Chris Yanke

Chris Yanke — Wed, 30 Dec 2009 21:54:46 +0000

This is a well defined document to disclose the unethical and unscrupulous side of our industry. But when do we start definining the more positive attributes? Right now because of the state of things these regulations and rules are good for letting the public know that this is the direction of our continued work in definining this industry. One good action does not make an individual continue to be good, contiuing to do good as an individual for others makes us all good.

By: Yvette

Yvette — Fri, 18 Dec 2009 07:06:13 +0000

I think now with tougher education requirements as well as licensing requirements fruad may not go way but we will see less people (crooks) flooding the industry. Before, you could be in the industry with no out of pocket expenses, now it is pretty expensive to be licensed and to take pre licensing and continuing education. Also with the economy in the state it is in, I think most of the bad will be weeded out. (Maybe I am naive) I still want to believe in people and that there are people who have good in them and still have a moral fiber in their being.

I hope that has Originators, if we do see wrong doing in our workplace we report it immediately and eliminate those doing fraud.

By: Raylene Ramos

Raylene Ramos — Thu, 23 Apr 2009 22:47:22 +0000

Mortgage fraud is here to stay! However, with new and upcoming regulations, it will become a more difficult task. Most people don’t relize how many different avenues of fraud there are and it’s about time that the regulators and government start cracking down on violators. Hopefully with stricter penalties, we will see a decline in fraud.

By: Mary McGraw

Mary McGraw — Wed, 22 Apr 2009 00:21:42 +0000

But even know days there is still alot of fraud going on its just not as easy as it was back then more people are more aware of things and are watching for them.

By: Mary McGraw

Mary McGraw — Tue, 21 Apr 2009 23:29:33 +0000

I just think back then fraud was easy but know its been look into more so its not as easy as it use to be and im glsd for that.

By: Chris Madden

Chris Madden — Sat, 28 Feb 2009 18:05:43 +0000

The relaxed standards were only part of the problem. Simply put, the types of loans originators were putting the consumers into produced more commissions.

By: Sharon Eva

Sharon Eva — Wed, 11 Feb 2009 19:58:08 +0000

Wow! “60 percent of cases, incomes were exaggerated by 50 percent or more.” I believe it. I think many people bought properties they couldn’t really afford on speculation that the value would increase drastically and the buyer could make a profit. Prices of homes were sky rocketing and Stated or NINA loans could help these investors purchase homes. In regards to the Inflated appraisals, I think we should implement a more complex system that would make appraisal more accurate and not easily inflated. I think determing a value on a home is very difficult since markets fluctuate and home value changes. All the other fraud issues I believe can be easily tackled but appraisals are very complex and am interested in future reforms on this matter.

By: Teresa Tait

Teresa Tait — Tue, 10 Feb 2009 05:59:54 +0000

I believe that whenever you have an industry that involves large amounts of sales generated income, you are going to have individuals that will figure out ways to abuse their roles for personal gain. It is sad, but money can bring out the worst in people, especially when the industry is as unregulated as ours was. Licensing should help, along with tighter underwriting and greater oversight of all parties involved in the loan process.Unfortunately, there are good people that suffer because of all this. I still believe there is a need for stated programs and hopefully after all of this gets figured out we will see some of these programs return for those borrowers that truly do qualify.

By: Robert Paterson

Robert Paterson — Mon, 09 Feb 2009 21:51:45 +0000

It’s amazing to me the different tacks that people will take to get themselves in to trouble. I can see where some one would overstate their income by 5% but 50% is a little incredible. People who are working together to scam banks and lending institutions are dangerous to everybody. It makes it hard to have trust in any part of the mortgage process from the appraisal to closing. As we see now everybody will come under closer scrutiny to make sure the facts are correct. I really hope that this will help the good people in the different industries rise and weed out scammers.

By: Scott

Scott — Tue, 27 Jan 2009 00:07:06 +0000

The mortgage industry with there revamped underwriting guidelines, stricter standards for appraisal’s new licensing requirements should help reduce the devastating results of mortgage fraud. It has hit home (literally) for everyone!

By: Carla

Carla — Wed, 14 Jan 2009 00:02:55 +0000

Mortgage Fraud is devastating in so many ways and affects so many people. It will take continued education and training to help reduce the amount of fraud – though I’m sure some will always remain. The schemers develop new schemes. I do believe that the new licensing procedures will help, along with the elimination of some of the riskier loan programs that were available. We must be made accountable for our actions. Raising our industry standards.

By: Mary Schimmelbusch

Mary Schimmelbusch — Wed, 31 Dec 2008 22:14:55 +0000

One would hope that with the new requirements set forth by DFI regarding loan originatiors it will help in reducing the mortgage fraud. Also the tightening-down of underwriting reqirements and appraisals to be reviewed more closely should help as well. It was very disconcerting to read that so many parties were involved in this fraud. It seems that greed was a great motivator for most of the fraud. Hopefully in the coming 2009 we will not see as much fraud due to new laws, but it will not go away overnight. We all need to do our part.

By: Cheryl J Barr, 510-LO-38949

Cheryl J Barr, 510-LO-38949 — Wed, 31 Dec 2008 19:03:21 +0000

Fraud has always been an issue where money is involved. With the loosing of underwriting guide lines, “misrepresentation” became much easier. Requiring people to have income documentation to qualify for a mortgage loan will in itself help eliminate fraud. I believe part of the problem was due to the fact that the industry was just so busy and everyone was working at full speed; that many safety checks where ignored just to try and stay a float of the work load. I work for a small company that has been together for a long time. We all check each others applications just as an in house saftey check.

By: John Sarausad

John Sarausad — Wed, 31 Dec 2008 09:07:56 +0000

I feel that preventing fraud has already been set by the bigger banks these days where the appraisal has to be ordered by one their approved appraisal management companies, giving the LO no control of the appraiser. On the other side, this is an opinion market of value and appraisers will have their certain types of adjustments and opinions based on their inspection. There is a line to draw on getting value and pushing value. I use a great title search tool so I can do my own comp searches to save everybody’s time. I believe this may put our clients uneasy especially when we are doing the 97% LTV rate term refinances for homeowners who’s ARM is about to adjust because that is a large portion of the homeowners I speak to.

By: Joe Hrebik

Joe Hrebik — Wed, 31 Dec 2008 07:47:01 +0000

Its amazing that multiple people (brokers, appraisers, title company reps) are involved in a lot of the mortgage fraud schemes. One would think that a natural “checks and balances” system would come into play… that someone would sound an alarm.

Its clear that some quantitative measures of character need to be identifed… to be used when determining whether to issue a license. One obvious measure would be no criminal record, with no exceptions… doesn’t seem too strict to me.

By: Dennis Tyler

Dennis Tyler — Tue, 30 Dec 2008 21:33:14 +0000

I’m not convinced that there is really that much more mortgage fraud now as opposed to previous years. I believe a great part of the increase in numbers is that the media has helped make people more aware of their rights, and the problems that do exist in the industry. In addition, with all of the finger-pointing, more people are looking into their loans and questioning the ethics of loan originators. Fraud should never be tolerated, and any company not dealing with problem loan originators needs to be dealt with very strictly.
I also suspect that the great problems of our immediate future will be with (1) distress properties, including pre-foreclosures and short sales. We constantly are getting approached with different twists that will supposedly allow LO’s to make more money, but that are also somewhat shady. (2) Undisclosed seller concessions, including silent seconds; and (3) over-inflated appraisals. The appraisers need transactions to close just as much as the realtors and lenders do. There are some that will do most anything to make that happen.

By: shelley safronek

shelley safronek — Tue, 30 Dec 2008 15:55:42 +0000

I am a one person operation so it is much easier to keep my operation free of fraud. After 18 years, I have not participated in this type of activity nor will I allow a client to submit this information to me. I was trained to underwrite files the old fashioned way when we had a “red flag” list and have made it a standard op to scour my files for any type of this activity.

By: Jim Haechler

Jim Haechler — Tue, 30 Dec 2008 00:57:46 +0000

I think eliminating stated income, SISA, NINA loans and reviewing all apprasials will help reduce mortgage fraud. Tougher guidelines for all involved will be a start. Like any business there will be good and bad people. So its up to us to help make this industry better.

By: Jim LaLone

Jim LaLone — Mon, 29 Dec 2008 23:50:33 +0000

Well,here we are again, it’s always a balancing act. We need to get the economy going again, but lenders are tight, values are down, maybe unfairly, but comps are hard to find. I worked for a bank with “Godlike” underwriters. {show me beyond a shadow of a doubt that you don’t need the money and we’ll give it to you”}. If it’s going back to that era, maybe we do need a US BAILOUT BANK owned by the US Gov’t. It’s probably better than the gov’t having a hand in all the business’ in the country. Look at the track record, everywhere socialism has been tryed, it failed. By the way, the bank sold just before it failed, guess thats a form of bailout too.

By: William Schornack

William Schornack — Mon, 29 Dec 2008 23:04:32 +0000

Unfortunately, loan fraud is a part of our business. Our goal should be to educate the people in our industry to recognize the most common schemes so that we can better identify the problems.
I personally had a borrower provide false income documentation that looked legitimate. It wasn’t untiol the lender pulled a 4506 at closing that we found out about the discrepancies. I think most of us are honest in our business practices, it does not pay to give up our careers over 1 or 2 loans!

By: Bartholomew Henning

Bartholomew Henning — Mon, 29 Dec 2008 22:41:28 +0000

Obviously the fraud that is happening will be reduces significantly – if there are funds available to appropriate to looking into these things. However, in any industry, there will be people dissecting the process and figuring out schemes to illegally steal. The best way to avoid the spread of fraud is to turn people in to the proper authorities when you see something funny. More often than not, we as humans tend to want to believe that all people are trying to do good. Even if it is obvious that they are not. Be proactive to help your industry is the bottom line!

By: Angela

Angela — Mon, 29 Dec 2008 22:22:36 +0000

With many lenders now ordering their own appraisals and the loss of stated, NINA and SISA programs I think fraud will drop drastically. I think the lenders that are still open for the most part have good underwriters. I also think that the brokers that are left are being more careful…. if they want to keep their business going that is.

By: R Scott Tollefsen

R Scott Tollefsen — Sun, 28 Dec 2008 22:53:16 +0000

Mortgage fraud starts with greed, whether it be the loan officer, the processor, the appraiser, the mortgage rep, the mortgage company or even to Wall Street. There is bad in all business’s and there always will be. I understand a human mistake but not a way to make a living at the costs of others.