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You want my buyer to do what?

Hi folks. I don't normally post two days in a row but this one's too good to not share.

This morning, I took my buyer back to the builder to do the contract for her purchase. This particular builder requires that buyers are pre-qualified through their preferred Lender who is on site. You don't have to close with them but you do have to qualify with them. They do this so they can remove the financing contingency from the contract.

Anyway, while our sales rep was preparing the contract my buyer and I had to go see the "mortgage momma" to get my buyer prequalified. Now folks, my buyer is a young lady and this is her first home purchase. She lives at home and over the last two years has had three different jobs. Two in her field of journalism and most currently working for her father in the family business as a marketing rep.

I guess the "mortgage momma" decided that "getting her through" would be a little difficult since my buyer hasn‘t had the same job for two years. Even though my buyer's credit scores are over 700 and she has a pretty good income. The "mortgage momma" did mention an FHA loan but thought it would be easier to just go conventional.

She then proceeded to "coach" my buyer by telling her to say she has worked for her father for two years. The kicker was to make sure dad confirmed it when they did the VOE (verification of employment) and to make sure he didn't mention that they were related. Then of course she gave us the cursory wink!!

In a nutshell, she was "coaching" my buyer on how to lie and commit mortgage fraud!!! And she did this with me sitting right there in front of her. I'm not sure she realized I was a Real Estate Broker, or she just didn't care and assumed I would just agree with her. After all, "Everyone does it".

Well, she was dead wrong! Broker Bryant don't play that crap! My buyer looked at me like "Why is she asking me to lie?" and I looked at the "mortgage momma" and told her that my buyer will not be committing mortgage fraud just to make her job easier. For some reason she seemed a little shocked!

We left "mortgage momma" and decided we would go a different way with the financing. If fraud is her normal way of doing business then doing business with her is out of the question.

I guess I need to write a letter to KB Homes on Monday to let them know their Countrywide "mortgage momma" is a disgrace to our profession. What's wrong with people? What do you think?

DISCLAIMER: I have no problem with KB Homes or Countrywide. BUT I have a serious problem with "mortgage momma".

EDIT: I have change the term "loan lady" to "mortgage momma". It seems there is a real Loan Lady in South Florida and she has politely asked me to make the change. This post in no way refers to the Loan Lady in Sarasota.

Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 09/29/2007 12:13 AM

Comments (84)

mortgage fraud

84 Comments on You want my buyer to do what?

SEP

2007

Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Blog Boy...

Liar. Liar. Pants of fire...Keeps popping into my head :)

Trust me...You don't want me to type what I really think. Or do you? :)

TLW...ROAR!

I think it is disgraceful and unfortunately it happens all the time.

Write a letter please! There is no excuse for loan fraud.

You already know what to do...do it

Dick Beals

Bryant, that really is ridiculous. It is no wonder that as an industry we are generally distrusted and not respected. I applaud you (clap, clap, clap) for standing firm and not allowing you or your client to participate.

It was loan fraud. Everytime you lie it gets easier, and easier, and easier..... High ethical standards need to upheld in all occupations.

Letter and call...shame on her! Shame shame shame....I tell you...everyone needs the code of ethics, a license and continuuing ed and and and and....geez.

I am so tired of mortgage brokers lying to try to get a loan closed. Let's get some rope and find a tree.

I see this ALL the time. They call it "structuring" the loan. Fraud by any other name is still fraud.

They knew not who they tangled with.

Sure it's easier to do a conventional loan. It is also easier to get an appraisal. It's also easier to avoid the lender fees which a seller is not permitted to pay under FHA. It's also easier to get a settlement before all the finishing touches are on so the buyer will have a 2 page punch list and hope the builder will come in after settlement to complete. Yeah, conventional is a lot easier. Bet they want to put her in an ARM too, huh??

So, the more things change, the more they stay the same. Countrywide, huh??

When you do your letter, send a copy Certified Mail to Angelo Mozilo.

This is why I don't "send" my buyers to lenders, I take them. Good job.

How in the Sam Heck do you run into these situations like you do? I guess it is illegal to have TLW deal with that lender like she dealt with your last fraudulent offer ... too bad.

Sick Bertha on her, or get TLW to show up with her counter offer tool. Or toss her in your gator pond. Tha mortgage mama should'a been ashamed of herself.

Makes me wonder how often this occurs.

Jay

Bryant--Wow--Good thing you were there so this first time buyer didn't think that all transactions are handled this way. I had quite the run in with a LO and posted a lovely email he sent to my client. LOs and mortgage brokers are not all created equal!

Good for you, and good for your client who felt the same way you did. I belive the norm right now is that Buyer would probable consider it. Morals are lax.

You go boooyyyy! *smile* And where the heck is Bertha today?

smiley

Good for you! Makes me think we need to be with our buyers even when they are in the app process of a loan!!

Hey guys. I step away for a few minutes and BAM!!! Comments everywhere! I guess I hit a hot spot.

You know the thing that irked me the most about this is she didn't even try to do things legally. We weren't in front of her for 5 minutes before she started coaching my buyer!!! My buyer hadn't even completed the application yet. This is definitely her normal way of doing business. There was absolutely no hesitation in asking my buyer to lie. "Mortgage momma" picked up the phone and showed my buyer what her dad needs to do when they call for the VOE. It was scripted out for us. I just sat there letting her dig her hole deeper and deeper. She didn't give a crap about my buyer!!!

I'm so glad you posted this because I've been saying all along that a lot of these bad loan would never have geen written if agents did their job.

Broker Bryant,

This mortgage menace scores a YIKES! No, she scores a THREE YIKES! These kid loan officers just don't get that you cannot do short cuts - you cannot lie, cheat or steal! There are plenty of honorable ways to earn a living in this business and to do it honestly. YIKES again!

Hi Bryant. I had this happen twice with two different loan people.......they actually sent me hateful emails because I we got up and walked out of their offices. Are they kidding? It makes me think it must happen a lot for them to be so nonchalant about it. Crazy....glad you posted this, but sorry it happened to your client.

Shocked and dismayed that you wouldn't condone fraud...???? I hope she isn't shocked when her boss calls her in!!!

Good for you, BB. If the lender were a KB affiliate (Pulte Homes owns their own mortgate company) I'd be surprised if this happened. KB, in light of their recent negative info to their shareholders, will find themselves in DEEPER doo-doo with this kind of transaction- report it asap (as if you hadn't, already)...and make sure that all items that are noted at the walk through are completed prior to closing. When things are "down", employees are cut, making a good walk through harder, and items found at walk through harder to get resolved. Be an a-----. Your buyer will benefit.

BB,

I do not need to think......Figures...welcome to the wonderful world of Real Estate.

Wow, that "mortgage momma" really underestimated you! I'm so glad you were there to protect your client!

Bryant - Well done, my friend. I wish more agents and brokers would stand up for what is right (and in this case, legal). I actually DO have a big problem with KB here in the Austin area. I think their homes are sub-par, at best. That being said, the builder wasn't the issue here, nor was her company. I can only hope that "mortgage momma" isn't doing loans much longer. This behavior is part of the reason for the huge mortgage debacle this year.

I had a very similar situation happen. When I approached the loan officer's manager, he suggested the same thing, (Back his LO up!!) I was treated pretty poorly for my objections (it was going to be my fault if the deal fell through)!! Leading by example I suppose. This does happen an awful lot, and I really believe many newer loan officers don't get that they are committing fraud, and many new agents don't understand that this is wrong. This is a fraud, and I have heard lots of cases of enforcement recently. Same thing with buyer/seller credits "outside" the transaction. Also fraud. don't do it.

Unfortunately some borrowers go along with this type of ruse. They'll do whatever to get the loan and home.

It sucks that there is not much professionalism and pride for this business, dont you think? During my younger days, I usually go with the "flow" not because I "agree" but because I do not like confrontation... I do not mean that I commit mortgage fraud but just in life and general conversations. I begin to start to fire up and speak my mind.... After all, I am accountable to myself and the guy up there.

What a great story! Unbelievable that the Loan Lady types still exist after the big lending shakeup. But, alas, I guess even cockroaches will survive nuclear holocaust...so why not the Mortgage Momma after the lending meltdown? Will you publish your letter to KB & CW? It would be a blast to read!

SEP

2007

Those people need to be hung....I have realtors who are always asking for cash so that they can get it both ways. Let me just say hthat these weknesses give bad names to our industries.

I'm sure this happens quite often, especially with the way that the mortgage mess that's going on right now. She should be reported to the banking authorities, as well as KB Home!

If less had been less lenders like "mortgage momma" we would probably not have all the defaults in our area. There will always be people who "s t r e t c h" the truth on their own -- they usually do not need to be coached!

It is not always the Company but the person who has caused this problem. I think this person as many thounds have been mislead in our businness.

Find a different lender, report the lady to whatever agency oversees those policies.

Duane Hosek in the Black Hills of South Dakota

Wow, so sad when I read these stories. It's the bad apples that taint the profession.

Bryant,

I bet you almost fell out of your chair. I know I would have. I'd be disappointed if you didn't write that letter. That's a big part of the reason we're in the mess we're in right now. It can't continue. Thanks for standing up for what you know is right. I'm sure your client is relieved to know that you are on her side.

Bryant- Good for you to get up and walk out. Write the letter, but then again, the builders push to get the loans done too. Katerina

I have no use for this unethicial person either - and I am sure there are a few that will not be happy with her at CountryWide

Bryant - Hope you are composing the letter already. Wonder if KB homes knows about this and the risky situation she is placing them in? Not someone I would want to have on my team. Good thing your buyer had her with you.

Jeff

It is great that you did not go along with her. If we all do this, it becomes standard practice.

I have seen it time and again, builders and their on site loan people. Who's best interest is being safe guarded besides the builder and the loan people, certainly not the buyer's. I am amazed at how often people walk into a builders place of business and really think the builder and their people want to help them get a fair shake.

Out here builders hate to see a buyer walk in represented but it isn't so much about the commission they will be paying but rather to whom the buyer gives their loyalty.

They want it on their paper and they are willing to pay us but then they want us to go away, to disappear like smoke in the air so they can do their manipulating and steer the buyers into buying into their programs.

Now I will say that we do have some reputable builders producing nice homes here but when the chips are down the builder are looking out for themselves. I as a buyer's rep won't put up with any B.S. whether it be from a twisted loan person or the builder's rep. My clients deserve the best and I do my best to see that things that are supposed to happen do.

Would I tell a buyer to walk?? YES!! If necessary but most builders will come round if someone holds their nose to the grindstone. They do in the end want the sale and usually will be willing to do the right thing if someone demands it of them but I assure you they would rather have clients walk in totally without protection.

What the hell is wrong with these people. It is so bad they don't even realize that it is wrong anymore!

it is our obligation as agents or brokers to report this kind of activity. i would also write to the builder and whoever is concerned. thanks for posting a good article and a very good point.

Bryant there is a lot of pressure on these LO's to get numbers and the ones with "challenged ethical standards" unfortunately will be the ones that make it if people like you do not inform the company of what transpired.

Hi Bryant!

I suspect your buyer decided to take her mortgage business elsewhere!! That's in line with an agent not disclosing a major material defect!!! WOW!!

Well, everyone does it. Isn't that the type of thing we were hearing from Nazi war criminals as their defense? Isn't it amazing that she would still go fraud with a 700+ credit score....

The sad part is, if you asked mortgage momma (and many real estate agents) she/they wouldn't even understand what she was suggesting is mortgage fraud.

Disagree with the statement that the folks at Countrywide would not be happy with her. I suspect that she would get a round of "high fives" that she got "another one".

This kind of this simply drives me crazy! I am amazed by all different parties that seem to think committing loan fraud is acceptable. I especially run across it with "owner occupied loans" which are in reality investment properties. I'm with you, I will not be a party to any of this!

DISCLAIMER: I have change the term "loan lady" to "mortgage momma". It seems there is a real Loan Lady in South Florida and she has politely asked me to make the change. This post in no way refers to the Loan Lady in Sarasota.

Good morning everyone. OK so I'm way behind on responding. I will be doing the letter to KB Homes next week. I would hope they want to know about this. I just want to make sure my buyer is locked in on her purchase before I do anything. I don't think it will affect her but you never know. She really likes this place and I have to be sure to not jeopardize her purchase in any way.

Linda Davis mentioned how many REALTORS(R) don't even realize they are participating in fraud when these things happen. I couldn't agree more. I see fraudulent offers all the time and when I call the agent on it most are newer agents and genuinely don't know that what they are suggesting is fraud. They just assume since the LO told them to write the offer that way that it most be OK. Education is the key. If you are a Broker make sure your agents understand fraud and are able to recognize it. Review the contracts in your office.

Lenn mentioned how many cases of fraud can be avoided if BAs were more attentive to what's going on with the loan. Again I agree completely. It's our jobs to look out for our customer/clients. We must be proactive if we want o put a stop to this crap.

As Darrel has suggested, if things are right grab your buyer and walk away!!!!

As always I appreciate your participation in the discussion. Thanks!!!

WE CAN MAKE A DIFFERENCE!

Holy freakin' crap! It just continually amazes me, yet it shouldn't, at what people will do on both sides of the fence. But more importantly, it's people like the 'mortgage momma' that give real estate and mortgage professionals, like us, a bad name. It just burns my butt! The majority of us are hard-working and honest. I know that we don't live in a utopia, but...

So did KB agree to sell her the house even though you walked out on Momma?

I would definitely call KB homes. Mortgage fraud is serious and I do not believe KB would condone...

It does happen all the time, there is simply no way they feel to get the loan through if the VOE needs 2 yr showing. I am sure she felt it was not BIG deal, but here is the clincher...She was only pre-qualifying her, that does not mean she had the mortgage commitment. Once the loan begins processing ALL these issues will come up again and then YOUR client will have to keep lying. It IS a vicious cycle.

Phyllis Pafumi

Bryant: I am so glad that your buyer had you to represent them. It is a down right SHAME that there are mortgage mommas and mortgage papas doing unethical and illegal activity. You know what else gets my goat? It is the wonderful first time home buyers that have never been through the process that are trusting their agents and lenders to do the right thing. SHAME SHAME SHAME on people who abuse others.

I run into folks like this more often than I wish to think. Those companies involved need to be made aware of what this person is doing on their behalf.

I like "mortgage momma" term better anyhow!

Here's the deal, with all the crapola going down right now with foreclosures and short sales, I do believe that real estate professionals NEED to be tracked and those that are tied to the purchases behind a large percentage rate of these foreclosures and short sales MUST be audited and their clients MUST be interviewed about how they conducted business.

There will be large parallels & pattern to tie certain businesses and individuals to FRAUD which could result in a good number of people sitting behind bars. In 10-20 years when money becomes loose again, do you think we (as a profession) would have learned our lesson?

Hmmm, was mortgage momma one of these scrupulous figures? The world may never know!

Renee, That's actually a very good idea. There was a builder selling homes in Poinciana back in 2005 during the boom. They were selling to folks in S Florida and telling them that as soon as they were completed they could list with their affiliated real estate company and they would sale it for $40,000 more than they paid for a quick $25,000 profit after expenses. They sold about 45 homes. From what I can see from my research ALL but 1 are in some stage of foreclosure. First they were NEVER worth the $225,000(what they paid). All were listed with the same REALTOR(R). I researched this particular agent about 6 months ago and he had something like 140 expired listings and only 2 or 3 sales!!! These homes were sold with inflated appraisals and stated income loans. I'm sure you have this same scenario in your area.

Great comments everyone! This stuff really pisses me off. Mortgae fraud has ruined my market.

BB- Can't believe there are still loan agents who are dumb enough to continue doing this stuff.. It is one of the problems when you use an inhouse lender from abuilder.. One of these days the FEDS will get involved and a few of these smart lenders will have a long vacation at a taxpayer funded facility.

BB, everybody is giving you advice about the letters you need to write, but I didn't see any mention of the state Attorney General. this type of loan fraud is a felony everywhere and not reporting a felony is also a felony almost everywhere. Protect yourself.

Bill Roberts

please write MANY letters to anyone who will listen.

This gives the good guys a bad name

Broker Bryant - You did understand. There are many agents that would have sat there and figured this must be the way it gets done. There are many borrowers that sat in that chair alone and assumed that if the representative for the lender was doing the coaching, it must be ok.

Mortgage momma should go to jail. To hell with a letter to the builder. Go to your local FBI office and give them the information with a written statement from you and your buyer.

If mortgage momma has mouthes to feed, all the better. Maybe her felony face on local t.v. will help other lender reps get it. Breaking the law and playing fast and footloose with the truth is part of the reason some people are in foreclosure.

God this irratates the devil out of me.

SEP

2007

You are doing the right thing turning her in! She should be fired!

Bryant,

Welcome to the jungle. Watch where you walk.

These venomous animals are always with us. There is a lot you didn't talk about, but anyone with a 700 FICO, and a down payment of any size, should still be able to get any house she can afford. There is always more than one way! Why commit fraud when doing it right is easer?

TRW explained the biggest problem lender are having in the current debacle. Quote the Lady: "

Liar. Liar. Pants of fire..." we're all burning because of people like "mortgage momma!"

Bill

William J Archambault Jr

The Real Estate Investment Institute

First National Mortgage Sources

Kaye, This was certainly just another day at the office for this lady. I could tell it was her normal way of taking applications.

Bill, That all sounds well and good BUT there was no felony committed. But I will definitely bring it to the attention of her employer.

Tom, I know you hate this stuff. You're a good man.

John, Unfortunately you can't report something that didn't happen. A suggestion is not illegal. The act didn't take place because we left.

Thanks for stopping by Todd.

Hi Bill, That was the part that really pissed me off. It's an EXCELLENT buyer. There is no need for her to lie about anything. It was just pure laziness on the MBs part.

BB, Holy BEEP.... Some people.. I would suggest you go this site. State of Florida. From their you can also file a complain with the state. Ohhhh what whas I thinking she worked for a direct lender and does need a license. So really what can happen to her.. Maybe this is a good reason to make sure you work with someone who is Licensed.

Boy BB - you and Lenn are on a roll! I love this stuff! I would love to see the builder's face when he realizes his "preferred lender" may have just cost him a sale! Even if she were to go through with the purchase with her own lender, it's great to know you nailed her. Every agent should realize the power of their presence and input when it comes to financing. If I'm handing over a contract for presentation and I knowingly give a letter I know is full of CRAP, then I am an accomplish and a party to fraud - plain and simple. Like you and Lenn, my license is NOT for sale!

BB: You really struck a nerve. I began to leave a long comment, based on what Renee commented, from a mortgage guy's perspective but it was too long, so I'll post. Thanks for bringing up this important topic.

Mathew, If someone works directly for Countrywide they don't have to licensed? I did not know that. That's not a good thing.

Irene, Great attitude. We owe it to ourselves and our customer/clients to stay clear of this crapola.

Hi Joey, Come back and leave a link once your post.

BB...Thanks for the permission. I was just about to email you. Here is a perspective from a home loan guy.

And, yes...many direct lenders, such as Patrion Mortgage (my company) and Countrywide, are licensed by the Department of Corporations, not the Department of Real Estate...so the loan officers don't have to be licensed. That DOESN'T mean there is no recourse...there's plenty.

It sounds like your client would have been an ideal candidate for an FHA loan and it also sounds like this mortgage momma just did not want to go to the extra work. It was easier to ask your client to lie. Isn't that amazing!!

OCT

2007

BB,

I know this one hit a cord!! Idiots!!!! thats all I have to say.

Tom Weiss

BB - A terrific example of the do what ever I can do to get "the deal" mentality. It is amazing that this stuff still happens on a daily basis. I am glad you are writing to Countrywide...somebody needs to step up and put a stop to this stuff. I wonder what Countrywide will do.

And asking the buyer out there in the open like that as if no one else knows that it is wrong!! This is another reason buyers don't need to fly bllind into the home buying or building process.

Marchell, She is perfect for FHA. You are right though. Too much work!!!

Thomas, That's really all that needs to be said.

Bill, It should be interesting to hear their response. I have a call in to the district supervisor for KB Homes. That's where I will start.

Virginia, See was very discreet. She actually got up and closed the door to her office first. Didn't want anyone over hearing "our personal information". Of course that didn't seen to matter when she was taking the preliminary mortgage ap.

OCT

2007

I don't make enough money to go to jail.

OCT

2007

Good thing you were there with your client. The very first class I took when I got my RE license early last year was on mortgage fraud, with an FBI agent as the speaker. The class and issue was and is so important that they're having it again this month. They (the FBI) has also set up an 800 number to report these things.

NOV

2007

I had the great displeasure of completing a couple of loans for folks purchasing through KB Homes ... and I won't even begin to tell you what they put us through.

I read somewhere the KB Homes has more foreclosures (by a large chunk) for first time buyers then any other builder ... wish I could remember where I read that ...

Deirdre, I spoke to the district supervisors for KB and CW about this situation. Both said that this didn't happen and I must be mistaken. They truly did not care.

DEC

2007

I missed this one first time around. Glad to have the link from Lenn's post. Wow!

JAN

2008

I'm glad I found this. Thank you for writing it and making us all aware of what can happen. Thank goodness you were there to advise your client and explain that we are NOT all like this. Honesty is the norm not that person's way of doing business.

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