Comments on: Examples of Mortgage Salesmanship. Consumer Beware http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/ Radical Transparency for The Real Estate and Mortgage Industrys Tue, 06 Jan 2009 23:58:18 +0000 http://wordpress.org/ By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-380 The XBroker Fri, 08 Dec 2006 20:27:58 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-380 What Jeff hasn't addressed (I realize his essay is focused on the consumer) is the amount of collusion occurring in mortgage fraud. He addressed what I call the BS fraud or fraud for property. What really kills the industry is the fraud for profit. Fraud for profit includes appraisal fraud, title fraud, etc. In these scenarios it takes multiple "professionals" to pull off the scam. I am talking about flipping schemes, investment clubs, and the like. Lenders can quickly amount losses into the millions as a result of these scams. The lenders aren't the only victims. Flipping and falsely inflated values destroy neighborhoods, cause real estate taxes to falsely increase and leave uneducated borrowers with debt and worthless properties. (I add the the following caviat for unsuspecting borrowers: If it sounds too good to be true, it probably is... listen to your mother). What needs to be done to curb this type of fraud is for the states and Washington to actually pass mortgage fraud specific laws. Georgia, if I am not mistaken, is the only state with a mortgage fraud law on the books. Also the penalties need to be a little more stringent and not typical of other white collar crimes. Back to the consumer aspect. Don't participate in a loan that you know you cannot afford. If you don't make enough to qualify do not get the home and definately do not go for a Stated Product, when you know you do not make the stated income. Section IX of the application (FNMA 1003) clearly informs the consumer that all information on the application is true and correct and that the lender and its assigns may continually rely on the information subject to fines and/or imprisonment. 12/08/2006 by Matt What Jeff hasn’t addressed (I realize his essay is focused on the consumer) is the amount of collusion occurring in mortgage fraud. He addressed what I call the BS fraud or fraud for property. What really kills the industry is the fraud for profit.

Fraud for profit includes appraisal fraud, title fraud, etc. In these scenarios it takes multiple “professionals” to pull off the scam. I am talking about flipping schemes, investment clubs, and the like. Lenders can quickly amount losses into the millions as a result of these scams. The lenders aren’t the only victims. Flipping and falsely inflated values destroy neighborhoods, cause real estate taxes to falsely increase and leave uneducated borrowers with debt and worthless properties. (I add the the following caviat for unsuspecting borrowers: If it sounds too good to be true, it probably is… listen to your mother).

What needs to be done to curb this type of fraud is for the states and Washington to actually pass mortgage fraud specific laws. Georgia, if I am not mistaken, is the only state with a mortgage fraud law on the books. Also the penalties need to be a little more stringent and not typical of other white collar crimes.

Back to the consumer aspect. Don’t participate in a loan that you know you cannot afford. If you don’t make enough to qualify do not get the home and definately do not go for a Stated Product, when you know you do not make the stated income. Section IX of the application (FNMA 1003) clearly informs the consumer that all information on the application is true and correct and that the lender and its assigns may continually rely on the information subject to fines and/or imprisonment.

12/08/2006 by Matt

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-379 The XBroker Fri, 08 Dec 2006 20:27:39 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-379 Jeff, as usual you bring it strong. I only part in some ways with you in regards to your first comment about fraud being committed by loan officers on a grand scale. I've been in the business since 1996. I would say that fraud in general was at an all time high in 1998-99. With the electronic 4506 checks that most prime lenders utilize, it's rare when you see "cut and paste" W-2's. Most fraud now days that is being perputated by LO's are of the VOD or VOR variety. There is also a number of "stated" borrowers that should be going full doc, or their incomes are "over stated". Measures are being developed through technology to crack down on these measures as well. I did enjoy the rest of the post immensely. I totally agree that their is allot of "bait and hook" lending going on. I 100% agree that you should never work with a broker who'll just throw a rate out at you. Bravo on those comments. 12/07/2006 by Karl Christen Jeff, as usual you bring it strong. I only part in some ways with you in regards to your first comment about fraud being committed by loan officers on a grand scale. I’ve been in the business since 1996. I would say that fraud in general was at an all time high in 1998-99. With the electronic 4506 checks that most prime lenders utilize, it’s rare when you see “cut and paste” W-2’s. Most fraud now days that is being perputated by LO’s are of the VOD or VOR variety. There is also a number of “stated” borrowers that should be going full doc, or their incomes are “over stated”. Measures are being developed through technology to crack down on these measures as well.

I did enjoy the rest of the post immensely. I totally agree that their is allot of “bait and hook” lending going on. I 100% agree that you should never work with a broker who’ll just throw a rate out at you. Bravo on those comments.

12/07/2006 by Karl Christen

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-378 The XBroker Fri, 08 Dec 2006 20:13:46 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-378 Nice. I love it. I bookmarked it and I gave you a fiver. 'Disclaimer'. You cracked me up with that. :) TLW...ROAR 12/07/2006 by "The Lovely Wife"...Broker Bryant's...Wife! Nice. I love it. I bookmarked it and I gave you a fiver. ‘Disclaimer’. You cracked me up with that. :) TLW…ROAR

12/07/2006 by “The Lovely Wife”…Broker Bryant’s…Wife!

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-377 The XBroker Fri, 08 Dec 2006 20:13:29 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-377 Jeff, it is so refreshing seeing originators feel so passionate about teaching the consumer. I was a processor for almost 8 yrs and all of the issues above where one of the main reasons why I got in the busines, I always felt that if loan originators would take the time to care and really understand their clients ultimate financial objectives,such above listed things would not have to happen. What I hated the most in my processing days where the floating locks and the bait and switch. Thanks for sharing this with the consumers. I believe by empowering them, it will make it very difficult for the not so professional originator to remain doing business. 12/07/2006 by Blanca Cholewczynski, XCO Jeff, it is so refreshing seeing originators feel so passionate about teaching the consumer. I was a processor for almost 8 yrs and all of the issues above where one of the main reasons why I got in the busines, I always felt that if loan originators would take the time to care and really understand their clients ultimate financial objectives,such above listed things would not have to happen. What I hated the most in my processing days where the floating locks and the bait and switch. Thanks for sharing this with the consumers. I believe by empowering them, it will make it very difficult for the not so professional originator to remain doing business.

12/07/2006 by Blanca Cholewczynski, XCO

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-376 The XBroker Fri, 08 Dec 2006 20:13:09 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-376 I don't see these things too often but when they happen sometimes it makes you want to scream. I've seen HUD-1's with huge lender fees and then topped off with a huge YSP. The borrower is usually new to the country and has been relying on the loan officer for some trusted advice. Most of the time the worst ones will always be at the closing table as happy as can be with a big grin on their face. I would too if I were making $10,000 on a loan. The borrower is clueless and is thinking that America is such a wonderful place. If they only knew. 12/07/2006 by Tim Maitski I don’t see these things too often but when they happen sometimes it makes you want to scream. I’ve seen HUD-1’s with huge lender fees and then topped off with a huge YSP. The borrower is usually new to the country and has been relying on the loan officer for some trusted advice. Most of the time the worst ones will always be at the closing table as happy as can be with a big grin on their face. I would too if I were making $10,000 on a loan. The borrower is clueless and is thinking that America is such a wonderful place. If they only knew.

12/07/2006 by Tim Maitski

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-375 The XBroker Fri, 08 Dec 2006 20:12:46 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-375 Jeff, let's see if your proactive coverage shields you! I'd like to link to you from my other blog. I presume you don't mind. 12/07/2006 by Maureen Francis & Dmitry Koublitsky Jeff, let’s see if your proactive coverage shields you! I’d like to link to you from my other blog. I presume you don’t mind.

12/07/2006 by Maureen Francis & Dmitry Koublitsky

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-374 The XBroker Fri, 08 Dec 2006 20:12:31 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-374 Thx Marc...thought I would pro-actively cover my arse ;) Thx Marc…thought I would pro-actively cover my arse ;)

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-373 The XBroker Fri, 08 Dec 2006 20:11:51 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-373 Bryant...hahahaa....;) Thx Lenn :) Jeff...right on, I have some pretty developed 'alternative solutions' for the Realtor community to weigh in on (near future post). I owned a Real Estate Brokerage for 3 years and learned alot about the industry. Its about time for me to 'change my voice' a bit and cross over to Real Estate (Realtor) related posts...minus the 'sordid dealings of the industry' content. Its the traditional agents economic and marketing models/strategies that could use a re-tooling, too benefit the consumer and Realtor. Ill be drawing from many sound resources, popular bloggers from the greater blogosphere, as well as a DC FTC attorney. Should be fun ;) Tom, Welcome to Fight Club lol, you never know what someones gonna throw inside one of my posts, careful! ;) I agree, the industry needs an enema...... Bryant…hahahaa….;)

Thx Lenn :)
Jeff…right on, I have some pretty developed ‘alternative solutions’ for the Realtor community to weigh in on (near future post). I owned a Real Estate Brokerage for 3 years and learned alot about the industry. Its about time for me to ‘change my voice’ a bit and cross over to Real Estate (Realtor) related posts…minus the ’sordid dealings of the industry’ content. Its the traditional agents economic and marketing models/strategies that could use a re-tooling, too benefit the consumer and Realtor. Ill be drawing from many sound resources, popular bloggers from the greater blogosphere, as well as a DC FTC attorney. Should be fun ;)
Tom, Welcome to Fight Club lol, you never know what someones gonna throw inside one of my posts, careful! ;) I agree, the industry needs an enema……

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-372 The XBroker Fri, 08 Dec 2006 20:11:26 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-372 Hi Jeff - I love the disclaimer! The majority of people in our business are OK - it's just that the bad ones are HORRIBLE. As far as the "worthless circular banter" - that would never happen here would it? LOL One thing (out of many) that really strikes me is your comment about people and their credit quality / score. I've seen this so many times- the average person has NO CLUE what their credit report looks like & frankly I just don't get it. It's so damn important! I always tell people to pull their own report once or twice a year - then they should never have a surprise or get taken to the cleaners by someone's BS! 12/07/2006 by Marc Blasi Hi Jeff -

I love the disclaimer!

The majority of people in our business are OK - it’s just that the bad ones are HORRIBLE.

As far as the “worthless circular banter” - that would never happen here would it? LOL

One thing (out of many) that really strikes me is your comment about people and their credit quality / score. I’ve seen this so many times- the average person has NO CLUE what their credit report looks like & frankly I just don’t get it. It’s so damn important! I always tell people to pull their own report once or twice a year - then they should never have a surprise or get taken to the cleaners by someone’s BS!

12/07/2006 by Marc Blasi

]]> By: The XBroker http://thexbroker.com/2006/12/07/warning-more-scandalous-mortgage-content/#comment-371 The XBroker Fri, 08 Dec 2006 20:11:06 +0000 http://xbroker.realestatetomato.net/2006/12/07/warning-more-scandalous-mortgage-content/#comment-371 we have too many yayhoos in this biz. we need a serious real estate slowdown to weed em out.... cuz they will be selling cars in 6 months if they cant find a loan. please, noone throw anything at me. i am not wishing for a slowdown 12/07/2006 by Tom Burris we have too many yayhoos in this biz.

we need a serious real estate slowdown to weed em out…. cuz they will be selling cars in 6 months if they cant find a loan.

please, noone throw anything at me. i am not wishing for a slowdown

12/07/2006 by Tom Burris

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