I was in a seminar given yesterday by the FBI fraud division. They were discussing their efforts to clean up real estate fraud of various kinds. Right behind me, an agent raised her hand and asked, ......."You know, for the longest time, we have been putting anything on the loan app that would get the buyer qualified. Is that fraud?"
Most of us laughed but then we realized she wasn't kidding. She was one of these agents who does loans and real estate. And, she was trained that you do whatever it takes to put the deal together, including commiting lender fraud by falsifying the information provided on the loan docs. Isn't this one of the main reasons that we are in this financial mess?? And, with unsophicated borrowers, they can run the rates up and stick them with pre-pays to increase their lender margin kickback. I recently saw a deal where the lender made 1% upfront and $12000 on the backend on $500,000 loan. Outrageous.
Back to the FBI. The presenter admitted that they just don't have the personnel to go after the onesy, twosy deals. But, if we suspect that an office or compay is regularily doing this, we should call the FBI office. Your information will never be revealed.