Read it, learn it, recognize it and report it.

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

Ok so I’m here to toot some horns today. Not mine, but I do feel compelled to highlight a couple members of ActiveRain and a few off site Blogs. Why? Because I think they have something important to say and we all should be made aware of it. I’m talking about mortgage fraud. I know this subject has been beaten to death but it really is important and will be affecting our business drastically over the next few years. Mortgage Fraud is running rampant through out industry. It is leaving a trail of ruined lives and is affecting market values everywhere. And we all pay the price. Mr. and Mrs. Homebuyer are going to be facing a very difficult time when it comes to finding financing to purchase a home. Lenders are going to be forced to tighten up their qualifications or they are going to end up going out of business.

This is going to put pressure on housing prices and unfortunately will spoil the chance for a lot of honest, hard working people to own a home of their own. We have not even begun to see the effects from all the shady lending practices and investor fraud that has taken place over the last few years. Folks, I am here to tell you, it is going to get ugly. And it is going to get ugly very quick. Remember the Savings and Loan crisis? I am not a negative thinking person but I think the coming crisis is going to be just as bad.

As Realtors, we need to be able to spot the signs of fraud and we need to report it to the proper authorities. I am by no means an expert on fraud. So, I am going to provide with some links here that may help you to educate yourselves and will also give you some resources to report it.

First, I’m not sure if you have noticed but we have new member by the name of Ralph Roberts. For those who don’t know, Mr. Roberts is a Realtor, author, lecturer, investor and fraud expert among many other things. Read his bio. Mr. Roberts has written 5 excellent books on Real Estate sales and investing. Anyway, his site at is an excellent resource for learning about fraud AND reporting it. I encourage you to visit it.

Another member of ActiveRain, Michael Richardson, has been on both sides of the table when it comes to mortgage fraud and has now made his mission to stomp out fraud one transaction at a time. He is an expert on this subject and has a great website

I have read several good Blogs this week also related to mortgage fraud. You owe it to yourselves and our profession to read these and educate your self on fraud in all it’s ugliness.

Damion Flynn’s ActiveRain post, from last night. Blew me away that people can be so blatant about teaching others how to become criminals.

Another great Blog dedicated to mortgage fraud.

And this one you will really like. This is a Blog from 24 year old “investor” who is now facing foreclosure on his properties and possible jail time. His Blog is very open and details his endeavor into committing loan fraud. I could not stop reading.

So folks, read it, learn it, recognize it and report it.

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***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

The BIO for Bryant Tutas


 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Comments (38)

Robert D. Ashby
Visual Approach Aerial Photography (Visual Approach Photography) - Plantation, FL
Turning Visions into Photographs (and Videos)

Thanks for the post Braynt!

Education is the key to protecting ourselves and our clients, but we need proper education.  I am going to be posting something shortly which I find a little scary, even if it is done with cooperation with Freddie Mac.  It follows in line with Brain Brady's blog about the insanity happening in the mortgage industry (IMO).

Check out my blog later today as I still need to formulate it.

Oct 23, 2006 01:44 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Robert, I will look forward to your blog posts. Im not sure anything can scare or surprise me but please try. This is stuff is ugly.
Oct 23, 2006 01:47 AM
Gena Riede
Riede Real Estate, Lic. 01310792 - Sacramento, CA
Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Another dimension to this is not only in the Loan field with "loan" officers...but also with Realtors acting in the capacity of loans. I personally had a situation where the agent, who is acting as both the realtor and loan officer sent an offer on a "pristine" home asking for $18,000 recurring, non-recurring costs AND a SEPARATE Addendum asking for $30,000 for "home improvement."

When I asked about the "home improvement", he indicated that it was like an "equity-line of credit"...then I asked if he planned on sharing this Addendum with the Lender. The answer was "no"...and he also indicated that the Title Co. that he deals with "knows how to handle this Addendum."

Needless to say, I told him that this would be considered LOAN FRAUD and that I could not accept it as written unless he wanted to place all the monies in the Offer.

As a side-note for those that don't have to present the offer to your Sellers (no matter what) and as soon as I told them it was Loan Faud, they were not interested for that reason & for the fact that it wasn't a good offer anyway.

The agent for the Buyer wasn't the least bit concerned and said "fine, someone else will accept our offer".

Great post and I hope it serves each of us to learn more about recognizing loan fraud and helping our clients and getting those unscrupulous "lenders" out!

Oct 23, 2006 03:22 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Damion, I have a deal on my desk right now that is very similar to the short sale outlined in your post yesterday. The house is brand new priced at $199,000 valued at $225,000 my seller owes $220,000 and is needing a short sale.

Offer came in at $199,000 "cash". Buyer wants to use his preferred Title Company, Buyer wants to handle all the negotiations with the bank. I called the Realtor this morning and asked for proof of funds. He was all concerned that I had spoken to the lender already(I hadn't) and proceeded to explain how once the deal is negotiated they will fax over a new contract for the seller to sign as they weren't really offering $199,000 but were going to start at more like $150,000.  "What difference does it make the seller is not getting any money anyway?" Oh well let the games begin!!

Oct 23, 2006 03:41 AM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider
As a mortgage broker, I would have to say that one sign that realtors can be on the look out for is stated income loans.  If you know that your client is doing a stated income loan, ask your client to verify that the income that is submitted to the bank is accurate to the income that they really make.  I have seen numerous brokers try to increase income 2-3 times more than what is really earned just to make the numbers work.
Oct 23, 2006 04:25 AM
Ken Smith
Suburban House Hunters - Arlington Heights, IL
Biggest issue with mortgage fraud is that those that play by the rules end up paying for it. The banks don't loose money on it, they pass along all of the costs to their other consumers.
Oct 23, 2006 05:40 AM
Chuck Walden
Silverton Mortgage - Dacula, GA
Amen!  Fraud is a rapidly growing problem, and everyone is going to suffer for it.
Oct 23, 2006 05:53 AM
Real Estate
Best Buffalo Homes - Ellicottville, NY
Great post!   We bookmarked it for future referencce
Oct 23, 2006 06:19 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Damion, Thanks for the additional info. Yep, I knew that. The idea is to get the bank as much as possible. I've done quite a few of these and my goal is to always negotiate the deal as HIGH as possible with the seller and the buyer and then run it by the bank. My seller was on the other end of fraud when he bought the house with the promise from the builder of being able to flip it for a profit.  He paid $225,000 for a house worth $200,000 with $5,000 down. The builder then referred them to a Realtor who immediately listed it at $265,000. They did about 30 of these and all are still on the market with new Realtors at very low prices. Countrywide has the 1st on these properties.
Oct 23, 2006 07:31 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Damion, I just had along conversation with the Realtor that had submitted the offer I currently have. I have sent him the link to this post. Hopefully he will visit and read up on this stuff. Countrywide has the 1st but only for about $170,000 so the 2nd is the one that will need to do a short. Why don't you post another post on this stuff today or tomorrow. I wonder if we should all use the same tags? Think we could get the first position on Google for mortgage fraud or short sales? Just a thought.
Oct 23, 2006 08:29 AM
Ron Withers ----Retired Mortgage Professional
Kissimmee, FL


In reference to using the same tags for exposure/google  position is an awesome idea. That is really brilliant! Go for it.

Oct 23, 2006 08:39 AM
Christine Adler - Fort Lauderdale, FL
SE Palm Beach, Broward & NE Miami-Dade Counties FL
I think flippingfrenzy is a great site. I have send a few customers there for some education. Ralph Robers is the best.
Oct 23, 2006 10:41 AM
Ann Cummings
RE/MAX Shoreline - NH and Maine - Portsmouth, NH
Portsmouth NH Real Estate Preferrable Agent

We had a group of lenders, appraisers, and REALTORS get caught up in some mortgage fraud stuff a number of years ago.  Some of them turned state's evidence and some served some real time.  What are they doing today.....several of them own large McMansion-type homes, big boats, flashy lifestyles.  Not sure they learned a single thing from the time they served!

I had an offer like one written about above...separate addendum with a large amount of money back for improvements, and some other monies on top of that for something....but all of it, on paper, covered the buyer's out of pocket money.  The buyer was an agent and a lender, and it just didn't feel right to me.  I'd never seen something like that before, so cautioned my seller about it, and seller wasn't interested in stuff like that.  Reading the posts above, I now know what it really was, mortgage fraud. 

Great post, as always, Bryant!

Ann Cummings

Oct 23, 2006 11:52 AM
joanne Douglas
Terrie O'Connor Realtors - Ridgewood, NJ
I am in need of an education here... not just on spotting mortgage fraud but the whole topic of short sale, pre-foreclosure and foreclosure.  One of the things I really like about AR is the open availability of such always make me think!  and then I have a zillion more questions.  Thanks BB --- I know what I will be doing for the rest of the night. 
Oct 23, 2006 12:07 PM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Damion, I will definitely look forward to your post. Let's keep this info coming. Realtors need to know this stuff as it is going to be very common practice with all the desperate sellers.

I will be standing firm on my commission. These deals are not easy and I don't plan on making less money for helping the lender avoid foreclosure costs.

Oct 23, 2006 12:37 PM
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL

Ray, there were a series of e-mails where they had manipulated amounts, signatures and price on appraisals (which were never completed). It was pretty black and white.  The first hint was the offer without seeing the house.

As Realtors it is important to keep a trail of everything that comes in and is sent out, I know it sounds like common practice, but one little slip and you can get pulled into the whole nightmare.

Hope that helps,


Oct 23, 2006 02:35 PM
Cheryl Johnson
Highland Park, CA

The web site looked a lot different back in September when I first took note of it.  I think the guy changed it because the mortgage fraud was so blatantly apparent back then?

Oct 24, 2006 10:04 AM
Rick & Ines - Miami Beach Real Estate
Majestic Properties - Miami Beach, FL

Here's a new post on red flags to help identify mortgage fraud: Detecting Mortgage Fraud .  Hope this helps,


Oct 25, 2006 02:28 AM
Nick M.
Certified Residential Appraiser- West Palm Beach Real Estate - West Palm Beach, FL
Realtor-Appraiser in West Palm-South Florida Real Estate Appraiser

Here is an interesting article on mortgage fraud and identity theft. I figured its pertinent.


Oct 26, 2006 09:30 AM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

"Big Nick"

Funny...I was just thinking about you and pop, there you are on my mail. Still want to help me. Come with me...Got something to show you.


Oct 26, 2006 10:08 AM