Today, I would like to introduce you to my guest, Ed Rybczynski formerly with Liberty Title Company in Baltimore where in 2003, Ed pleaded guilty to Federal conspiracy stemming from house flipping and mortgage fraud. Ed served time in Lewisburg Federal Prison Camp. Today,Ed spends his time educating others about fraud and helping Title companies to be proactive with strategies designed to reduce the risks of loss. Ed has served his time and currently consults making others aware of how there must be a change and not status quo…read, devour and become aware so that you are not a victim of fraud in 2007.
Real estate fraud is a remarkably complex social issue with a spectrum of costs and consequences that are generally misunderstood. It’s now identified by the FBI as the nation’s fastest growing type of white collar crime. The Treasury Department reports a 35 percent increase in 2006, over 2005, of suspicious activity claims made by lending institutions. Still, the published number of incidents is understated because many crimes remain undiscovered, unrecognized or unreported. The term real estate fraud describes a broad category of crime that loosely includes mortgage fraud, predatory lending, property flipping, postal fraud, identity fraud and bankruptcy fraud.
Technology is not without blame for accelerating fraud statistics. All real estate is listed and sold locally, yet lenders and title companies increasingly employ a business model that encourages automated processing from remote locations. Sadly, homes being purchased have become digital images with a stated value while consumers are reduced to faceless ambiguous names on a computer screen. Fraud clearly flourishes when lending and settlement services are anything other than community based. Another contributing factor is the approach taken by state governments when prescribing licensing and continuing education standards for real estate professionals. In April of this year, the Government Accountability Office released a preliminary study of the title industry requested by Congressman Michael Oxley. Surprisingly, 3 states plus the District of Columbia don’t require the licensing of title agents; 18 states and the District of Columbia don’t require title agents to pass a test before licensing; only 20 states have an educational requirement as a pre-requisite to licensing. A similar scenario currently exists for the mortgage banking industry.
To read the rest of this artice that Ed Rybczynski has written go to Sacramento Real Estate Voice.