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WHAT WILL IT TAKE TO END MORTAGE FRAUD? IT MAY BE HAPPENING.

MORTAGE FRAUD? IN SOME STATES IT MAY RESULT IN A "PERP WALK."

ACTIVERAIN HAS seen a been he source of numerous posts covering the many aspects of mortgage fraud. We have some very knowledgeable lenders and real estate agents and brokers who are interested in the subject matter and it helps to share our experiences and resources.

MANY OF US HAVE BEEN VERY VOCAL ABOUT OUR BELIEF THAT PROSECUTIONS ARE ONE OF THE SOLUTIONS TO THIS SCOURGE OF THE REAL ESTATE AND MORTGAGE INDUSTRY. The below web sites paint a completely different picture. It appears that the prosecutors are coming around and putting resources where it will help control these would be "get rich schemes".

HEARD ON THE NEWS TODAY: "The Governor of Minnesota signed a bill making mortgage fraud a felony."
This led me to research the activities of several states to see what they are doing to stamp out this scourge of the real estate industry.

Recommended Reading from Fannie Mae
https://www.efanniemae.com/utility/legal/pdf/fraudupdate0707.pdf

Miami-Dade, Florida.
Eleven arrested in mortgage fraud crack-down
The first round of arrests warrants for criminals dealing in mortgage fraud schemes brought in 11 people
http://www.miamidade.gov/mayor/releases/07-10-05-mortgage_fraud_arrests.asp

Alabama
Mortgage Fraud
http://www.azleg.gov/legtext/48leg/1r/summary/h.hb2040_06-28-07_astransmittedtogovernor.doc.htm

Arizona
Residential Mortgage Fraud law
http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/48leg/1r/laws/0243.htm

California
Prosecutions
http://mortgagefraud.squarespace.com/journal/four-indicted-in-mortgage-fraud-case-in-sacramento.html

Colorado
New law requires registration
http://www.rockymountainnews.com/drmn/real_estate/article/0,1299,DRMN_414_4840431,00.html

Connecticut
Indictments for predatory lending
http://mortgagefraud.squarespace.com/journal/2007/9/5/connecticut-ag-announced-law-suit-filed-in-predatory-lending.html

Georgia
Mortgage Fraud Scheme
http://mortgagefraud.squarespace.com/journal/2007/9/6/three-sentenced-in-georgia-mortgage-fraud-case.html
http://www.nationalnotary.org/news/index.cfm?Text=newsNotary&newsID=813

Illinois
New Law used to prosecute
http://www.illinoisattorneygeneral.gov/pressroom/2007_09/20070913.html

Indiana
Prosecutions
http://www.in.gov/sos/press/2007/04262007.html

Maine
Attorney General Sues
http://www.allamericanpatriots.com/48734231_maine_maine_attorney_general_sues_mortgage_lender

Maryland
Indictment
http://www.mortgagefraudblog.com/index.php/weblog/permalink/maryland_mortgage_broker_indicted_in_commercial_loan_fraud/

Massechusetts
Not Yet?
http://www.boston.com/business/articles/2007/04/26/patrick_proposes_mortgage_fraud_law/

Minnesota
Prosecutions
http://www.usdoj.gov/usao/mn/press/econ/econ0146.pdf

Missouri
Mortgage fraud prosecutions
http://www.usdoj.gov/usao/mow/news2007/rodd.ple.htm

Oregan
Arrests
http://mortgagefraud.squarespace.com/journal/2006/10/20/two-mortgage-brokers-indicted-in-oregon.html

Virginia
Indictment
http://www.mortgagefraudblog.com/images/uploads/harrelsonindictment.pdf

Washington
http://apps.leg.wa.gov/rcw/default.aspx?Cite=19.146

AND LAST BUT NOT LEAST, BECAUSE I HAVE AN APPOINTMENT:
http://www.aina.org/news/2007041194958.htm

States with the highest incidences of mortgage fraud. Source, FBI.
California, Florida, Georgia, Illinois, Indiana, Michigan, New York, Ohio, Texas, and Utah. Other areas significantly affected by mortgage fraud include Arizona, Colorado, Maryland, Minnesota, Missouri, Nevada, North Carolina, Tennessee, and Virginia

Posted by Lenn Harley, Real Estate Broker, Maryland & Virginia on 10/10/2007 01:34 PM

Comments (18)

mortgage fraud, prosecution for mortgage fraud, mortgage loan fraud, real estate fraud

18 Comments on WHAT WILL IT TAKE TO END MORTAGE FRAUD? IT MAY BE HAPPENING.

OCT

2007

Lenn, Thanks for your typically excellent overview of the current state of the problem and resources to back it up. Great post.

Lenn,

I happened to read the Florida article on the Rachel Dollar blog just before I jumped back on AR where your post was one of the most current. The Miami arrests included two Realtors, as well as mortgage brokers, title agents, straw buyers and the like.

Let's hope this is a trend in the right direction. Great job!

There have been many "perp" walks for our state already and I'm grateful for it. I really think that mortgage fraud (at least in my area) is something of the recent past. Today many mortgage brokers and reps have left the business, and the underwriting process is stricter than it has ever been.

Lenn,

It's sad that it has come to this, but no one told these Mortgage Idiots to be Crooked!! I do my work by the book, and I think it should be that way across the board..

Good Post!!

Tom Weiss

Lenn:

Your post is a testiment that there is already enough laws to go after the fraudsters. We don't need increased legislation to do this. Rachel's site is probably the most comprehensive site on mortgage fraudsters.

Great post Lenn. You should read on under EXEMPT! Banking personnel are exempt...This is like going to your bank and asking the teller what you should invest your extra money in? They are not qualified to make suggestions, but tell you to buy CD's, neither are most bank managers, but they are exempt...which means that the public should know and not ask them. All Financial Advisors are required to do a feasability study to first determine if the investment is appropreate for that person...Just call your bank manager and ask if they have a Securities license? Series 6,or 7 and 63.

Thanks Bill. I've ranted and raved enough about wanting to see some "perp walks". Looks like the law enforcement folks are listening to us.

Fred. There are a number of them in Florida. I wanted to give an overview of the entire country. Looks like the law enforcements with the help of some new laws is working.

Diane. It would appear that things are changing.

Kris. Let's hope so. If it's gotten too "hot" for them, that's a good thing.

Tom. Thanks. I agree. We work very hard to do our job right. The folks that look for the easy dollar have to go.

Bill. I agree with the exception of, perhaps, Massechusetts which is not doing anything, YET.

Chuck. Thanks for jumping in. Everyone needs to know the facts.

The focus has been on some of the organized groups. There is are also those who make under the table attempts, like taking undisclosed credits. If they do not want something to appear on the HUD-1 look out!

Randy. Thanks for commenting. You're right. That's a test because that is the permanent record.

Lenn

I didn't see NY or NJ on your list. Maybe we just close doors first!

Thanks for this Lenn, this really needs to be stamped out indefinately...

Laurie. I got so disgusted reading the different states reports, I just couldn't stomach any more.

Just Google "mortgage fraud arrests [state]"

Jason. Thanks. It surely does. It won't. But, it surely should.

Lenn, It's about time our States start stepping up to the plate with mortgage fraud. Until recently the only recourse we had were the Feds and they just don't have the time or the man power unless millions of dollars are involved. We all need to do our part and report it every chance we get. We can make a difference.

I agree Bryant. This has been on my mind since the post you made about the new home builder's lender and her "oh so clever" manipulation of your buyer. If you hadn't know nwhat was going on, she could have gotten by with it.

I was glad to see so much enforcement activity too. Most of it quite recent, but better now than never.

I learned of the Minnesota case some days ago. This is only the beginning here. There has been a lot of pressure by housing activists, more importantly by our Attorney General who has made this a priority.

Jay

Hi Lenn - I hope the rest of the states that aren't yet on your list show up there soon, including my own state. The 'perp walk' is the best dose of medicine for sure! We had some here in the late 80's who ended up doing that, along with some appraisers who were in cohoots with them. There should have been a few agents serving time with them, too, but they turned state's evidence and saved themselves.

Ann

OCT

2007

Lenn,

This is such great news!!

I also think there are too many Settlement Attorneys and Title Companys that helped to allow this to happen. They knew what was happening - how could they not know? Instead of blowing the whistle and /or informing buyers, a lot of them turned their heads.

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