Category: Mortgage Fraud
Secondary Marketing Fraud Question from an Anon Caller
Question from an anonymous phone caller: “I work at retail bank. When rates were dropping, I asked my processor to lock several FHA loans. All the paperwork to lock was completed and sent to management. Management did not lock the loans, hoping to ride the wave down and earn extra yield for the bank….rates rose [...]
View PostLoan Originator Liza Bautista Finally Arrested
Liza Bautista was a mortgage broker with a strong client base inside her Christian church in Tukwila. After successfully closing several prime loans for folk with A-paper credit, she targeted consumers who were turned down by lenders and created two sets of loan documents. She submitted the credit history and identity of her prime, A [...]
View PostMortgage Fraud 09: Bellevue
From the Seattle Times: A Seattle grand jury has indicted seven people, including owners of two Bellevue mortgage loan companies and an escrow company, in a 40-count indictment alleging conspiracy to commit mortgage, bank and wire fraud totaling more than $47 million. The indictments allege the seven conspired to fraudulently purchase dozens of Seattle and [...]
View PostBellevue LO Sentenced
From the Seattle Times: A federal judge today is expected to sentence a former Bellevue loan officer to prison for perpetrating what prosecutors say is one of the largest home-mortgage fraud cases brought so far in Western Washington. Christopher Brooks, 39, pleaded guilty to conspiring to commit wire fraud in connection with fraudulent loan applications [...]
View PostQuarterly MARI Report
MARI has released their quarterly report on mortgage fraud. Scan the PDF here. What systems did your company have in place to detect mortgage fraud during the bubble run-up of the past several years? What systems does your company have in place today? If a loan processor spots potential fraud taking place by an LO [...]
View PostFrom CR: Fraud in the 2008 Vintage
From Calculated Risk: If you haven’t yet had a chance to read this article by John Gittelsohn in the Orange County Register about a real estate sale that was financed by Wells Fargo in January of this year, please do so now. And if you were, like most people, working on the assumption that lenders [...]
View PostOver 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 [...]
View PostMortgage Fraud Part 3: Recent Developments
Before we use to rely on automated underwriting systems and credit scores we had humans who would carefully underwrite mortgage loan files. During the caveman human underwriter days, loan originators and loan processors knew that underwriters could make or break a file. An underwriter had god-like power to grant or deny the American dream. They [...]
View PostMortgage Fraud Part 2: Case Studies
We’re lucky to be living far, far away from the mortgage fraud happening in other parts of the United States, right? Not so fast. In part two of this three part series, we’ll take a look at some mortgage fraud cases in Washington State. Case Study: Century Mortgage; How to succeed in a down market and earn [...]
View PostMortgage Fraud Part 1
Fraud is generally defined as the “intentional misrepresentation of the truth in order to deceive another.” Chris Swecker, Assistant Director of the FBI’s Criminal Investigative Division, defines mortgage fraud as any form of material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan. Before 9/11, mortgage [...]
View PostMortgage Fraud 2008: Bellevue
This story is from the Seattle Times. A federal indictment has been issued for a Bellevue loan officer and his assistant. A former loan officer at a Bellevue mortgage company and his assistant have been indicted on a charge of conspiracy to commit wire fraud in a scheme that prosecutors say involved using straw buyers to [...]
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