States are going after brokers and appraisers big time:
There are two primary reasons that consumers can't repay loans. The first involves an unexpected change of circumstance, such as a job loss or medical emergency. If consumers experienced a short time during which they could not make payments, but if they are now back on their feet financially, they should ask their lender for a deferral -- moving a delinquent payment to the end of the loan -- or other repayment restructuring. If the change of circumstance is permanent, more drastic measures may be necessary, such as a quick sale to pay off the debt, or a "short sale" in which the lender agrees to permit the house to be sold for an amount less than the debt. A second category of defaults involves loans issued as the result of deceptive lending practices. While most lenders and loan brokers in Maine are highly reputable, there will always be exceptions. If a case involves fraud, forgery or other illegal activity, our office steps in and takes regulatory action. We have suspended loan officers who coached borrowers to falsify income, and one who temporarily gave a consumer funds to make it appear that she had savings in the bank. We have encountered inflated appraisals, and even a fake W-2 form that a loan officer fabricated on a computer.
"Every time a home is foreclosed on, why not require the lender to make the original, and subsequent, mortgage applications part of the record?
And then have someone from a regulatory agency, like the federal Office of Thrift Supervision, examine the documents to make sure that no fraud was committed on either side of the table at the close of escrow.
This agency also entered the fray last week, too, at the behest of the nonprofit Neighborhood Assistance Corp. of America. It asked the OTS to force Countrywide to redo loans for borrowers having trouble making payments. The organization (www.naca.com) has established the Home Save Program to provide assistance for homeowners with unaffordable loans who are at risk of losing their homes.
During an event in Washington, D.C., a panel of borrowers discussed the financial trouble they are in with their mortgages.
On Thursday, Bill Ruberry, an Office of Thrift Supervision spokesman, told the Web site MarketWatch that the OTS will deal with specific Countrywide cases that the group brought up on Thursday.
"We are going to look into each one of the cases and talk to the institution to determine how their problems can be worked out," Ruberry said. But he declined to comment specifically about how the office would resolve the issue with Countrywide.
The agency did not return calls seeking comment Friday.
Bruce Marks, chief executive at the NACA, agrees it might be time to start reviewing records, too. "I think everything should be looked at. You've got to put the responsibility where it should be."