Over One Thousand Felons Originating in Florida
The Miami Herald has complete a thorough and frightening investigation into rampant mortgage fraud taking place in Florida. They found that over 1000 convicted felons obtained a loan originator license, even after submitting background checks to the state in order to receive their license.
The Herald has a full website devoted to their investigation located here.
What’s the solution to the Florida problem?
Do you see other systemic problems in other states?
What about the ability for a loan originator to escape licensing by working for a different type of institution that does not screen for felony convictions?
Do you believe the National Mortgage Licensing System coming our way in 2009 will reduce the problem of mortgage fraud, make it better, or no change? Why?
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Comment by David Hopkins on 2 October 2008:
NMLS is a good start if they have the man power to screen the LO’s and brokers up front to stop the criminals before they strike.
Criminals are a crafty bunch of cock roaches they will infest anything they can get money from and when the banks were giving out money it was a perfect place for them to breed.
THe way i understand it is that everyone doing real estate loans will have to register with NMLS. So, it all depends on how the NMLS polices’ the country. The consumer could avoid most of the bad guys by using a local mortgage company.
Comment by Michael Belisle on 3 November 2008:
Wow, I have never seem that website. Without the man power to regulate an industry it quickly gets out of control with greed and scams. Florida seems to be a melting pot for greed. I can see how the people approving the licenses can over look so much. How can they investigate so many people under the time deadlines they had? If they didn’t approve them then I am sure there was a rebuttal or court hearing that would take days of preperation. I can see how many felons were overlooked. But that doesn’t make it right. A law cannot be put into effect unless there is adequated enforcement.
Comment by Kevin Haynes on 4 November 2008:
If they can implement NMLS that would be a big step. Licensing and background checks are a must especially in Florida & California. The licensing and exam procedures here in Washington and other states has to be a positive development.
Comment by John Mayfield on 15 November 2008:
This all makes WA look really good. Florida is a mess! The NMLS will be great step in rehabilitating Florida but it seems to me that they need to protect their consumers better. As a consumer, you assume that the person you are giving all of your most valuable information to is trustworthy, especially when it comes to finances. LO’s should all have to go through a thorough background check along with the Mortgage brokers. What really got me was that LO (Smith) who lied but regulators had missed the 30 day period, had to issue him a license. I say, no they did not! That law needs to be erradicated.
Florida needs to send their lawmakers to states that have successfully executed the proper system in protecting homeowners and take it back to Florida and do it. It will take time but will definately clean it up.
Comment by Kelly Molenda on 20 November 2008:
I believe the NMLS has been a great idea for WA. This would be helpful in other states as well. I believe that all states should set requirements for LO/Broker licensing and should take as much time as necessary to fully investigate into each applicant.
Comment by Cheryl Nopson on 23 November 2008:
The WA NMLS is great. I can’t beleive Florida allows so many loopholes. In WA it appears they really go over what was answered on our licensing requirements. I have seen if you answered a question incorrectly, DFI did indeed go back to the originator for answers.
Comment by Jeff Hilt on 24 November 2008:
I think the NMLS will reduce the level of mortgage fraud, but only slightly. This particular issue of crooks slipping through the licensing cracks and then commiting crimes is just another example of the darker side of human nature … sort of like what happened in “The Lord of the Flies, if you’ve ever read it, which is an example of what humans are capable of in the absence of a regulated society.
The NMLS will add another layer of oversight in the licensing process, and may help screen out some of the people who shouldn’t receive licences. However, the state and federal governments need to do a beter job of regulating those in the field. Only by increasing the numbers and the powers of regulators will this type of problem decrease. Some are afraid of increased regulation in the industry. Well, to them I would say this “If you are doing business with the utmost integrity and with a fiduciary responsibility to your clients, what are you afraid of?”
Comment by Gail Burgess on 25 November 2008:
It is impossible to fathom the crimes in Florida continued with just minor fines attached. I do think the NMLS will help protect our industry from some predatory lending, and I am glad there are more safeguards being put in place. I believe regulations at all
levels must be implemented to a greater degree.
Comment by Darren on 27 November 2008:
NMLS in MA has been nothing but a headache for Mortgage Brokers and Originators. it takes about 8 months to get approved and the MA D.O.B asking for more information. The downside. A mortgage originator, though licensed must be sponsered by a broker. What was the sende in getting a license? The fee’s are out of this world. 500.00 for the license and 165.00 application fee. For me NMLS has been nothing short of a headache. If you must be licensed,so be it. Make all licenses a Mortgage Broker license and forget about the originators licenses. make a license valid for two years and stop screwing the originator. I have a feeling this NMLS will have many problems in the future with privacy and will continue to turn the cost to originators. The dept of banking must understand, this is step one. Mortgage lender originators must and should be licensed as well.The lenders have always employed less qualified originators and I have seen it. In short. NMLS may be a good idea on paper, but in the real world, its been nothing but a headache. Get rid of it!
Comment by richard martin on 2 December 2008:
Yes I believe the NMLS will be the beginning of an ongoing strucrure of what is required to make the Mortgage Industry the highly ethical and financialy efficient business that it must become if we are to avoid another Fiasco like the present. When Recognizable Professional Standards are demonstrated the public trust and credibility will be greatly increased benefiting everyone.
And along with the new National Regs. and rules it should become more difficult for crooks and fraud artists to play their dirty games on Lenders and borrowers.
Comment by Bridgette Verna on 6 December 2008:
After reading the article concerning Florida I felt sick. Its such a such a shame that a state that is known for harboring criminals would allow the originating of loans without strict back ground checks. Shame on the state. I believe most of the problems that we are experiencing today started higher up in the chain. NMLS is a great start. If we are going to make the mortgage industry a safer place then it must start at the top, not at the bottom. Its lazyness to start at the bottom.
Comment by Toby on 8 December 2008:
I’m sorry to say that bottom line, unless people are held accountable for their actions, then fraud will continue to be prevailant in our industy – regardless of licensing and required training. Let’s face it, the sort of person willing to commit fraud is also the sort of person who will be willing and able to find a way to cheat the licensing / training system as well. Policing an industry is massively time consuming and expensive – and most importantly, it requires those who are doing the policing to be ethical themselves.
This is a work in process – don’t expect for there to not be kinks simply because a system is originated. To think that what has transpired in Florida is not, has not, and will not transpire here is naive.
Comment by James A. Nelson on 9 December 2008:
Hopefully, the new HUD/FHA Licensing program for the mortgage industry will weed out the obvious felons. Still, until honest men
and women take a stand against the dishonest, greed will always be
present. The really sad aspect of the Miami Hearld series is to
read about those who lost their homes or money in the process.
The ignorance of the Florida State Government bureaucracy is appaling. I alwys wonder when I read such information, did any State employees get fired as a result of this disaster, human as well as financial?
Comment by jeremy hickling on 9 December 2008:
The NWMLS does a good job of policing the bad guy Realtors and I think the NMLS will do the same. Once they grow up a bit – These articles illuminate the fraudulent pracitces conducted well and I am more knowledgable as a result, and I see the job the NMLS has ahead of them.
Now, I am not a felon but I gotta believe that they fall into 2 groups.
1) Those that are really bad
2) Those that did a stupid thing and got busted. And regret it.
I think a true ‘felon’ doesnt experience regret. Thats the really bad one. – those are the guys that worry me. Iv’e had plenty of investors in the past approach me with some whacky idea’s of how to get things done. And for the most part they were stupid and not genetic throw aways. Like some. A more informed buyer / refinancer makes better decisions. Sometimes.
Comment by Teresa Gallaher on 10 December 2008:
I too believe the NMLS is a good start in regulating who get into our business. I can’t believe the situation Florida found itself in. The scary part is Florida is not the only state facing these issues. I am shocked at the washington DFI website showing brokers that were not allowed to renew their licenses due to background checks showing fraudulant and some cases felony histories. If I were a borrower looking for a mortgage I would be scared to death. We are privy to the most sensitive of information. SS#, cc #’s etc. The person with a dishonest heart could reak so much havoc.
We started on a process that can limit this fraud, we have to make sure there is a policy of enforcement in place to ensure that those that are licensed stay honest. A law is useless if it is not enforced.
Comment by Laura Shields on 10 December 2008:
I believe that the mortgage industry professionals should be monitored by NMLS and regulated in a central location.
It should help for sure!
I also believe that loan officers should be like the electrician, plumber, welder etc…..become a apprentice before the journeyman with hours of training and years in the industry before being a Loan Officer! Maybe this will keep those who jump on board when the going is good a little more hesitant to do so if there is some training involved!
Comment by David Bietz on 11 December 2008:
The NMLS is a start to helping police the mortgage industry. I’m not sure that it’s the answer to fix all the problems. Maybe if the
penalties were stiffer for mortgage fraud this might be a deterrent.
I agree with Laura Shields that maybe an apprenticeship program, something like appraisers have to do before they can be licenced.
This would stop some of the jumping in only in the good time etc..
Comment by Marty Boswell on 14 December 2008:
I strongly agree that the NMLS will be a good thing for current and future loan originators. It’s about time we should have a license and be educated in the mortgage industry. I have seen and heard how originators in this industry have taken advantage of the consumer. It’s about time we stand behind our job as a professional.
Comment by Vance Won on 15 December 2008:
It is harder and harder to earn a living in the industry due to the decreasing homes values, lack of credit, tougher underwriting standards, and lack of borrower confidence. I believe the NMLS will help curb mortgage fraud but only because people who would commit fraud have already left because easy money days are over.
Comment by Branda Luke on 18 December 2008:
In reading the “ongoing coverage” section of this website, it looks as though Florida is already taking steps to resolve their issue starting with the restructuring of their Office of Financial Regulation. I also think that no one should be exempt from licensing at all. That would resolve the issue of felons looking to avoid screenings by target-selecting their companies.
Comment by Luis Diaz on 19 December 2008:
WOWWW!!, I had a sence of why to be licensed but florida is like on your face FRAUD..
The solution for Florida’s problem is a total “Make Over”. Sorry, it does not look better than that. Florida has to start by changing their DFI’s officers who may not know what is they role and what to do to protect their consumers.
Nope, I never heard of similar problems in other states.
Regarding the ability for a LO to escape licensing, that is like an open door to access a house chitchen!. I mean that if Florida does not enforce the licensing program, it is clear that they may not even care of whom they are allowing to talk to consumer inside there homes. Those rats felon LO (by the way, these are not LO’s AT ALL!) are allowed to work anywhere they want. If there are no licensing then it seems like there is no need to screen felons in Florida. That is a very sad situation for Florida’s residents.
I really can see that somewhat this NMLS will clear the way for more actions to be taken and, meanwhile will reduce this kind of problem in Florida as in other states too. Because, I expect that the implementation of the NMLS will yeld for more controls among the each state’s regulation.
Comment by Alice Yu Uy on 21 December 2008:
National Mortgage Licensing System will definitely reduce the problem of mortgage fraud, and for the other state a full background check of each LO applicant should be done thoroughly and let it be known to them that the state is really performing its duty about it.
Comment by Sean Clift on 23 December 2008:
For way too long our industry allowed any blind dog with a note in its mouth to go out and rape and pillage the American public. I am excited to have a national tracking and lisc system. I am happy we now have continuing ed requirements and finger print (as long as they are processed correctly) requirements. Like any new system there are wrinkles to iron out, but it is good to have the beginning of a system that will at least start to track, monitor, and weed out the filth.
I am however a believer in less govt intervention, so I am a strong believer in “us” the lending professionals monitoring our own offices, communities, ect. If we see a flagrant foul, then we should call a broker and speak with them, if they do not respond, then report them. Lets take care of us so no one else has to.
Comment by Carmen Ziranda on 24 December 2008:
I think with the new changes from National Mortgage Licensing System is going to be harder for people that is in this business just fo the money to continue.Also I want to mention that companies need to double check the backgroungs more closely to make sure they are not missing any information regardign their employees. This new system will keep well monitored everyone in this industry. I agree though that “no one” should be exempt of taking the licensing test and doing the CE. Every indivual originating loans should comply with the same requirements.
Comment by Mark Middlebrooks on 24 December 2008:
From what I have seen on that website, I would say that the first step toward a solution in Florida is to replace the Office of Financial Regulation with a different Regulatory system.
I’m really not sure what other states may be having similar issues.
I think that the NMLS has the potential to be a great regulatory system. I hope that it will also eventually require that all originators be licensed regardless of the structure of the institution they work for.
Comment by R Scott Tollefsen on 28 December 2008:
If you are a felon in Florida, you are also a felon in every other state. I know from reading the Washington State DFI website that a lot of Loan Originators are turned down for lying about a felony on there record and I think that with licensing here, it is cleaning out the bad people for the most part. However I do not understand since this has become a nationwide problem with the mortgage mess why they cannot just implement a federal licensing system. I do think NMLS will help but it is not a requirement for most states so if one can not originate loans here in Washington, then they will just head to another state until something is done by all states.
Comment by Angela on 29 December 2008:
Wow! This is shocking. I think NMLS will definately help with these issues. I think background checks should be manditory for any company who’s employees indivuals that will be handling personal information of consumers. It shouldn’t just be limited to Mortgage Brokers.
Comment by Jim LaLone on 29 December 2008:
Yes!!!! This sounds like a good start. Back ground checks are necessary and a great addition to our industry. We all seem to be painted with the ‘broad brush’ example. It’s like a gun law, it’s not the honest armed citizen that doe’s the harm, but they get are always a participant when liberals pass out the blame. funny how it always comes back to that “fiduciary thing”. I’m lucky to work in a small office where we all watch out for each other, so fraud detection is less of an issue.
Comment by William Schornack on 29 December 2008:
Convicted felons obtaining mortgage licenses in Florida!
Does this surprise any of us? Florida can’t even count presidential votes accurately. Take a look at how Jeb Bush influenced the past 8 years.
Comment by Jim Haechler on 30 December 2008:
I’m not really suprised. Many people where denied license from Washingtons DFI after background checks. NMLS will help weed out future loan originators. But like any agency its only good as the people working for it. You may eliminate all felons with background checks, but that won’t eliminate some of the bad LO’s. So it starts with us. We all have to have our own code of ethics.
Comment by Dennis Tyler on 30 December 2008:
I’m not convinced that the NMLS is going to do a lot to clean-up our industry. It may be just another way to collect fees. With that said, the NMLS, along with continuing education requirements, the economy and each of us doing our part will make a difference. I had a potential loan originator interview with me last week. He had been let go from his previous lender due to fraud. When I told him we would not hire him, he was quite surprised, indicating that other lenders did not seem to have a problem. That’s what we have to identify and work together to stop. In addition, if one originator is required to be part of the NMLS, every originator should. I think it’s a crock that if the lender has the “right” license, the originator does not have to be licensed. Big banks are the biggest culprit for problems right now. They set their own standards, which I have found are sometimes very shady.
Comment by Brian Paine on 30 December 2008:
Wow, the solution to allowing convicted felons access to the most important personal information belonging to law-abiding citizens and consumers? The answer could go awfully deep and I’m highly opnionated about my stance as a politically “conservative”, but “independent” patriot. We’ve seen corruption in every branch of government, a lack of morals and ethics in every agency, why would it be different from state to state, especially if the penalty is a catholic sister’s third grade ruler slap on the back of the hand?
If you’re dealing with any occupation where granting access to social security numbers, bank accounts, etc., is a portion of the process then stringent background checks should be a fundamental condition for licensing. That’s not rocket science…holy smokes, are you kidding…why would you allow “predators” access to children, armed robbers access to weapons, etc. There’s a much deeper social and political issues here!
Will a National Mortgage Licensing System reduce mortgage fraud? I hope so…will it deter fraud, no, I don’t think so…morals and ethics aren’t taught anymore; however, doing something is a always a step in a positive direction.
Comment by shelley safronek on 30 December 2008:
I think the NMLS will certainly help but I agree that cock roaches will infest wherever there is significant opportunity to make quick dollars.
With the increasing technology capabilities, it is extremely difficult to protect yourself. I am not fond of providing any information over the internet as well as providing it to a loan officer as these predators lurk everywhere! I think the best opportunity to protect the consumer is to increase the barrier of letting them in this industry in the first place. Education, licensing and unfortunately license fees are all great steps towards reducing the bad seeds from coming in to this business. However, there are rotten seeds in every industry, so prosecute prosecute prosecute!
Comment by Susan Lohse on 31 December 2008:
The laws don’t really seem to mean anything unless the state regulator has the personell to enforce them. Florida obviously had a huge problem. It’s unbelievable that they would issue licenses to convicted criminals. Some lied on their applications and some told half truths, but with both, the state still gave them licenses. These people should never be able to get any position where they are directly working with people and their financial information – of course they’re going to rip people off. Those poor Florida residents trusted that the state had granted the LO’s a license because they were trustworthy. The state really harmed their people in a big way.
Comment by John Sarausad on 31 December 2008:
I don’t see how this could have been overlooked if over 1000 LOs were improperly licensed after submitting a request for a background check. I guess there really wasn’t a background check done after all. Florida has been extremely unfortunate to have had to go through this and this is one of the reasons why Washington is more stable than most states. I remember having to wait almost two months before my background check was done. I’m glad I passed and am proud to be a licensed LO
Too proud sometimes.
Comment by Joe Hrebik on 31 December 2008:
Florida’s problem was lack of appropriate penalties when mortgage fraud was evident. When background checks turned up criminal records prior to licensing, state regulators found excuses to grant licenses anyway. Already licensed brokers that comitted mortgage fraud recieved punishments that were far too light. State regulators even chose to ignore consumer complaints.
NMLS should help prevent mortgage fraud by creating consistency across state lines. Persons with criminal historys would be prevented from simply crossing into another state to continue criminal activity when background checks are at the national level.
Comment by Cheryl J Barr, 510-LO-38949 on 31 December 2008:
The National Mortgage Liscening System is good start to trying to detect felony’s in our state. When fraud was detected if the penalites where enforced and more strict, i.e. jail time; it would help stop some of the fraud. The consumer could also do some research of his own, use a local company and avoid many of the issues.
Comment by Mary Schimmelbusch on 31 December 2008:
I do think the NMLS will reduce the number of felons getting a license but there are still unethical LOs in the business.
Comment by Carla on 14 January 2009:
Enforcement is obviously lacking and is what is needed in the State of Florida. This reeks of government running amuck and no accountability. Other states could indeed have some of the same issues. The NMLS should be a good way to help police and enforce
the licensees. It will take some time to work out the bugs – but if all states get on board and the requirements get regulated from state to state, this should reduce the number of those improperly licensed.
Pingback by Obama plans on tighter regulations for mortgage brokers | Rain City Guide on 25 January 2009:
[...] than the federal government (well, with the exception of Florida where they have proven their supreme incompetence.) We need only to look at RESPA and the miserable job HUD has done trying to enforce this massive [...]
Pingback by Obama plans on tighter regulations for mortgage brokers | Guilda Blog on 26 January 2009:
[...] than the federal government (well, with the exception of Florida where they have proven their supreme incompetence.) We need only to look at RESPA and the miserable job HUD has done trying to enforce this massive [...]
Comment by Scott on 27 January 2009:
The NMLS is a good start in the filtering process
Comment by Robert Paterson on 6 February 2009:
1000 mortgage brokers in Florida that are convicted felons. That is the states short coming.
Why can’t Florida institute criminal background checks? They sure do in Washington. As for loan officers who forge signatures and work history there is a place for them,It’s called jail
Comment by Teresa Tait on 11 February 2009:
WOW!!!! I knew things were bad but what went on in Florida is unbelievable. Rather than blame the felons, I think Florida needs to get rid of all the people at the top and start over with intellegent, responsible individuals who are willing and able to do their job correctly.As a rule I am not a big fan of government intervention, however what happened in Florida is a great example of why their needs to be more.It is sad to say, but there will always be criminal minded people around. We just need to make sure that the correct rules and regulations are in place to discourage them from wanting to join our profession.It was just too easy for them.I am sure there are other states out there with similar problems, hopefully not as bad though. The NMLS and LO Licensing are definately steps in the right direction.
Comment by Sharon Eva on 11 February 2009:
Having a NMLS will reduce the problem of mortgage fraud but it will not eliminate it. I think it will work only if extensive background checks are performed for applicants and every licensee is monitored regularly to ensure criminal history is clean. Having this kind of system inmplemented in states like Florida would ensure decrease licensed LO’s with felons. I believe it sould be law that ALL persons involved with loan transactions whether it be a processor, an LO at a bank, etc. should all have licenses (which means clean background checks).
Comment by Chris Madden on 28 February 2009:
I believe the NWMLS could be a good thing for our industry, but in order for it to be a success they need to be doing a better job at screening potential applicants than the states are doing currently. Seems the states are more concerned with milking the LO’s for Licensing renewal fees, as well as annual CE fees. With all the revenue being generated by the new fees the states could certainly do a better job at policing, and enforcement. Hopefully the NWMLS can prevent some of this fraud, as well as keeping the felons out of the industry. If not, what are the fees for?
Pingback by DFI Interpretive Letter on Loan Modifications | Rain City Guide on 14 March 2009:
[...] to read that law and can I just sell him the answers to the test. I explained that I understand Florida is the mortgage fraud headquarters of the world but up here in WA State, there are no test answers for sale. He said he was still not going to read [...]
Pingback by DFI Interpretive Letter on Loan Modifications | Guilda Blog on 15 March 2009:
[...] to read that law and can I just sell him the answers to the test. I explained that I understand Florida is the mortgage fraud headquarters of the world but up here in WA State, there are no test answers for sale. He said he was still not going to read [...]
Comment by K. Elliott on 23 March 2009:
I have written to every government agency I can find and have been tossed one excuse after another and have been passed from one state office to another with no assistance or an explanation for being ignored. Just the other day I watched a news program filmed on Feb 16th 2009 of Senator Bill Nelson going throughout the Tampa Courthouse displaying the mold there, (nothing compared to the mold left for me in the home I bought), and what the workers are experiencing health wise due to this mold. Senator Nelson even claimed respiratory distress after just a tour of the courthouse; I had no choice financially but to reside in the toxic mold for nearly 3 years. All of those years in respiratory distress
What is it that makes those who work in the courthouse more worthy as human beings than myself? I pay my taxes, I educated myself in Florida colleges, and I suffer devastating health issues just as those courthouse workers do. The only difference is that my mold came in the form of mortgage and disclosure fraud and misrepresentation, perpetuated by the OFR’s negligence in giving a mortgage brokers license to a known to them criminal.
I have been victimized not only once by the crooked mortgage broker colluding with the sellers to put me in the contaminated home with a forged signature and altered documents. (I didn’t buy more than I could afford, nor did my finances warrant a predatory loan, I’m a veteran of the USAF).
Now I find I am victimized twice in finding that the OFR gave the brokers license to Art Seaborne, the mortgage broker, just 9 years after the OFR revoked his real estate license for mortgage fraud, oh and just one year after a chapter 7 bankruptcy… it doesn’t take a brain surgeon to see what is going to take place there does it??? (All this information was not easily accessible to find out before a closing).
Those of us left with nothing by the mortgage criminals the State of Florida licensed are again ignored and victimized by our Presidents mortgage assistance bill, which completely ignores those in this position who are the real victims of predatory lending and mortgage fraud. So it looks to me like its time the State of Florida stepped-up and took responsibility where it is most definitely due, they licensed the crooks after all.
I have moved from the house, which sits in Sarasota rotting to the ground from water intrusion and toxic black mold, with 2 liens on it for foreclosure. But I still pay each and everyday. I am awakening daily struggling to breathe. I take 2-4 pills each day just to get air in my lungs and go through a box of tissues daily before I can even start my day. It’s like getting a life sentence for a crime someone else committed, and no home to show for it. This is just plain wrong! Not to mention criminal actions by the State.
My court case has stalled because the sellers and the mortgage broker can afford high priced lawyers who just keep the case going to use up what little money I can make while they use the money they stole from me to fund their criminal activities and representation. This alone is where the States fraud victims fund is owed in assistance to those of us stuck fighting the criminals you licensed for our inalienable rights. After all OFR, you are supposed to be working through regulations to protect us from this type of crime.
I am a 48-year-old divorced woman who had so much promise for my future. I had planned to go back to UFS for my masters’ degree but can barely afford living expenses and a lawyer now.
I know through research that I am not the only one in this situation. That is why the victim’s fund must be brought back and used to assist us in our struggle, after all our hard earned money is now paying for the high priced lawyers your licensed criminals are hiding behind. The State of Florida cannot continue to hide the egg on their face. But you do have the opportunity to make good on this.
I would like the opportunity to address the legislature concerning the victim’s fund. We who are the victims are not just another situation we are human beings, tax-paying citizens who deserve to live and breathe and have our lives back.
Receiving assistance from this fund could very well mean the difference of living a full life or living a lifetime of sickness and financial disability to so many of us… your victims made so by your mistakes. I was raised that when you realize that you made a mistake and you are given the opportunity to rectify that mistake doing so is the only right thing to do. I am pleading with the State of Florida to rectify their mistake and save our lives. This is the State of Florida in the year 2009 for God’s sake, not the Wild West. I am on a mission to make things right, won’t you please stand-up and help me as you are the only ones who can?
A quote from OFR Terry Straub said… “We look at all the facets around, you know, whatever file, and we predicate on the fact that everybody deserves another chance,” said Terry Straub, director of the OFR’s Division of Finance, which regulates the mortgage industry in Florida.
Where is another chance for us Terry Straub? We did nothing wrong and lost everything!
Comment by Mary McGraw on 21 April 2009:
Wow what kind of “back ground” check do they do?? Maybe they should go through a thorough FBI back ground check. Maybe this would weed a few of these felons out. Unbelievable and very scary for the consumer, just never know who you will be sitting down with.
Comment by Raylene Ramos on 23 April 2009:
With our company, we all need to go through federal background check and we allow no felonies to work with our company. However, that does not mean someone couldn’t slip through the cracks. It starts with the justice system and the mortgage companies can only do so much to check out a persons background. If it’s not reported, what more can you do?
Comment by Yvette on 18 December 2009:
What’s the solution to the Florida problem, Although these people did not steal others identity when filling out their applications for license, if they are crooks, they can easily steal someone’s identity and pass a background check.
I think the problem for that state and other states are the same. If somone really wants to be a crook, they are going to be a crook. I think however, they should do a national background check through the FBI instead of just a State background check. I also feel that maybe the licensing time should be longer than 30 days. Maybe 60 days, but they should also have the right to revoke a license at any time if they find out that any material fact in their application has changed or that they lied on their initial application.
I do not feel that all convicted felons are bad. I think there are some that may have gotten into trouble when they were young and are totally rehabilitated. I think it depends on the nature of their crime. Obviously if it is a theft crime, fraud, larceny, etc, they should not be admitted into this industry.
What about the ability for a loan originator to escape licensing by working for a different type of institution that does not screen for felony convictions? I think in this day and age almost every institution are doing background checks and in Washington State you will not have the ability to become an originator without having gone through extensive pre-licensing education, screening and testing.
Do you believe the National Mortgage Licensing System coming our way in 2009 will reduce the problem of mortgage fraud, make it better, or no change? Why?
I agree with some of the comments. I am not sure that the National Mortgage Licensing system will provide you with more than knowing if someone obtained a license in a different state. It would be different if with every applicant they did their own independent background check on each licensee. They are primarily relying on the State Regulatory to manage it. They are collecting huge fees but I am not quite sure what the fee goes for.
I think in order to cut down on identity theft, that maybe credit reports are done a little bit differently. Maybe the borrower calls in their ssc# to an approved credit reporting/employment verification (Like the Work Number) agency, gives the credit reporting agency their Mortgage Broker’s identifying office number (for instance NWMLS assigns a four digit office number to each Real Estate Broker office)the credit reporting agency then forwards the credit report only displaying the last four of the ssc# and also employment information. The Loan originator can then finish processing the application for submission. It limits the amount of information that is shared or seen by the originator, processor (who is not licensed and has access to the clients information as well) escrow, etc. There are a lot of people in this industry creating fraud, not just the mortgage broker or originator, everyone needs to be policed to reduce fruad.
Pingback by To the Students from the Dec 10, 2009 REO Class at SKCAR Bellevue : ceforward.com on 22 December 2009:
[...] Here’s the story about the Miami Herald’s investigative piece into the 1000 felons originating loans in Florida. [...]
Comment by Chester on 27 December 2009:
Great site… But really, not all felonies are the same. The majority are crimes that are the “stereotypical” felonies, but learn the facts before you soapbox.
For example, in some states purchasing items used for sexual stimulation is considered a felony. True. Dui. Sex on a commerical airliner, yadda yadda.
I hope that NMLS will review and determine if the crime fits the punishment.
Remember, we are on of the most advanced and highly educated countries in the world and I hope that we all act accordingly.
Enjoy….
Comment by Chris Yanke on 30 December 2009:
The problem I’m seeing is that we aren’t being told what the process for background checks can be. First solution idea would be to have the mortgage companies be liable for up to $250k in damages per each employee. Why would this be my first choice? well it would require bonding for each employee and that is a cost but in order to acquire a bond you have to pass certain requirements that would address past felony convictions, fraud, etc. Using this as a benchmark might help relieve some of the burdens being put on various agencies in some of these states.
With regards to a Loan Officer working for an agency that does not have a license requirement currently, it’s my suggestion that the legislation include language that like FERA mandates that “All” practitioners performing duties as defined by FERA/RESPA/TILA be subjected to the same requirements by 2011.
I believe the NMLS will reduce the Fraud overall in the coming years since the practice will enable better enforcement.
Comment by Alison Clark on 23 February 2010:
I think that you have to go to the people that are licensing not just point the finger at the originators with felony convictions, some people are rehabilitated and some come out worse. I do think their financial and credit info should be a factor as it is important to but each person should be looked at individually as close to 1/3rd of convicted felons are innocent and that it what has been proven think how many are actually innocent. I also think it depends on the felony and if its at all related to the financial industry. I think politicians,lawmakers and court systems are just as much at fault and have greed issues and corruption if not more than others. I think each institution should have their standards without being discriminatory and i think NMLS is a good start.
Comment by Jillayne Schlicke on 23 February 2010:
Hi Alison, “close to 1/3rd of convicted felons are innocent”
Really? Do you have a link with more details on that statistic?
Thank you.
Comment by Daniel Mulvehill on 27 February 2010:
NMLS is another jurisdiction I am a beleiver in each State to investigate the LO or Licensee , why take away fee income to each state at $30 cost times thousands with the economic times , and again the Attorney General should do the back grounds and have a FACE TO FACE interview requirment , we had to go to school for 12 years why not go through a personal interview to see the applicant personally there may be some NO SHOWS etc?
Comment by Bryce Zimmerman on 22 May 2010:
NMLS and Wa St. DYI liscensing requirements seem to be in order, as I know 2 people personally who’ve haven’t been able to obtain a liscense and previously were originating loans in this state. I’m happy to see the restrictions to felons as well as the educational rquirements to add credibility to our industry. I do feel that these requirements should be standard for everyone that is originating mortgage loans, regardless of the institution, because we are all providing the same service to the public.
Comment by Angie Williams on 27 May 2010:
Licensing LO’s who are convicts is a crime. This video does seem a bit “Entertainment Tonight” however the facts remain that this were convicted felons.
Ok.. I will say it again.. the licensing and continuing education has been good. I do feel it needs to be the same licensing for all originators regardless of which entity you work for. It is very interesting to go back and read the blogs posted prior to today’s requirements.