Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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arkygirl
A "Friday Funny"....

Found this thread at the Mortgage Grapevine at BrokerUniverse. One thing I learned here is that insurers are not liable if fraud is found in the origination...hmmmm...

Anyway, the thought of the FBI hiring the same to people who put us in this mess to ferret out the fraud is just ludicrous. Wouldn't they just buy shredders and white-out and spend a lot of time trying hard not to implicate themselves in the fraud???


MORTGAGE FRAUD AND THE MESS OUR INDUSTRY IS NOW IN

gotta figure the way values are dropping and the way banks are dropping like flies, programs are being cut off, etc....is probably about 50% due to mtg fraud over the past few yrs.

gotta imagine, fbi is going to have a field day very soon.

is there even going to be enough space in the jails?
by aaron@ula1 August 3, 2007

You are correct and the MBA has requested $6.2MM from Washington to increase the FBI´s mortgage fraud force, it´s a press release. That will be the next wave as they get through and perform thorough due diligence on the defaulting loans. I don´t think it´s 50% fraud, maybe misreprestation, yes. It´s coming and those guys don´t mess around, it´s a crime with prison penalties. There will be examples, you can count on that. The Lenders are hiring for fraud units as well..... they´re looking for it.
by SilentAngel August 3, 2007

If you want to put anybody in jail start with alan greenspan, we traded a stock market bubble for a real estate bubble
by mikeg21625 August 3, 2007

FYI- Mortgage Insurance programs to not cover lender/bank if Fruad or material misrepresntation is found on a loan.

Genworth, MGIC, Radian - all hiring ex-cops like gangbusters so they wont have to pay out !!
by just another darn ae August 3, 2007

As an AE, I had some fraud discovered on a few closed loans last year. Once detected, the FBI was contacted who promptly visited and gathered information. Then the agent stated that he would be back in touch but not to expect a call anytime soon beecause they were so backlogged. He stated that he MIGHT be able to start working the case more in about a year. It´s almost been a year and still nothing from them yet..................
by cmbrunetti August 3, 2007

I have to say cebrunetti your company is a minority. I would hear from A/E´s that they would just decline the file and move on, so as not to bite the hand that fed them. Lenders are as much to blame for turning a blind eye to it. Hell many lenders reps (AE´s) would come in and encourage fraud to my L.O.´s They were promptly shown the door
by greg4mtgs August 3, 2007

Do you think the FBI is hiring? Maybe they need help. There are 46,000 mortgage professionals out of work. They know what to look for. What ya think?
by I think I can August 3, 2007

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Passing the buck, period.

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Lets be open minded here, the average felony arrest an FBI agent makes is 1 every four years!  The FBI has had information on Mortgage fraud from thousands of victims for at least 9 years. All of the arrests and convictions of Mortgage Fraud have been against individuals. 
 
With that little data I don't think we can't make any intelligent decision about hiring X-FBI personal to do much of any law enforcement.  They maybe further ahead hiring "Bank tellers" they know more!
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I think the FBI and also Congress should ask victims what should be done with regard to enforcement and regulation?

We have been through every aspect, i.e. predatory lending fraud, mortgage servicing fraud, broker/loan fraud, foreclosure/auction fraud, circuit court/bankruptcy court fraud, securities fraud- including securitization of loan pooling and insurance backers.

If you don't go through it, you don't know it!
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FYI- Mortgage Insurance programs to not cover lender/bank if Fruad or material misrepresntation is found on a loan.
***********************************

Why is that?  You cannot be insured for a criminal act.

That is why everyone is so hesitant to keep the findiings without admitting guilt.

No guilt, insurance pays their legal defense and any damages.

I like the new wave of borrowers that might just insist criminal charges
be filed.  They've got the proof of fraud.

Who wants that proof?  What?  No one knocking down the doors to get at the truth?

Dee


 
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A Denver FBI agent told me flat out listen we are not here to protect you we are here to protect the banks. I've been to over a half dozen local FBI offices from coast to coast and they refuse to provide any information at all or any
verification of contact names, dates, purpose of visit etc.

It's my understanding than many of the agents want to help and many are even quite angry about governmental/corporate fraud but the investigations are getting derailed at the top.

I appreciate Gary's comment about the reality of how the FBI works even if they did want to pursue these cases individually they don't have the manpower, however these crimes are run in a top down fashion and they would just need to go after the perps at the top such as Larry Litton, Roland Arnall, Adam Bass etc.
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Of Course!

That's how they all stay afloat.  The FBI works with federal agency's like the Department of Justice and also banks.  The FBI does get involved with Police Civil Rights violations, but these request comes from the Department of Justice or the President.  

More recently, I believe at the request of Congress and HUD Inspector General,  the FBI has gotten more involved with  Mortgage Fraud basically from the banks perspective, i.e. loan and property flipping scams.

What the FBI is missing on this one, is in the case of Foreclosure Fraud, banks, lenders, mortgage servicers and attorneys work along with some of these (scam artist) real estate investors who steal innocent people homes right from under them.

I even go out further on the record and say that in some cases these real estate investors may be Field Inspectors that Litton hires out to break in homes and removed household contents that also purchase these same homes at auctions.  I know of one case were these auction/bidders did not get financing for over (5) months to purchase a foreclosed home.  The homeowner tried to recoup the home from them, but the mortgage servicer and the attorney both refused, even though title had not legally changed hands.

What would stop this type of fraudulent act, is if the court would not ratify an auction sale until the bidder/purchaser has legitimate financing.  If the bidder can not settle his or her loan by (60) days, then the home should go back to the original homeowner.  In many states, even if the bidder defaults on his or her  loan, the court will not return home back to original homeowner, but only to the bank, lender or mortgage servicer. 

With regards to  the property and loan flipping,  the original homeowner gets screwed because his or her property is auction off for penny's on the dollar or in some cases less than half of what the market value of the home is worth.  The investors buy practically the same house for a cheaper price and with a cheap coat of paint, then in turn put it back on the market for twice or more than the auction price.

While the poor homeowner is lucky to walk away with penny's on the dollar, in some cases the homeowner gets nothing at all. The Auditors that are hired by the banks, mortgage services and attorneys are crooked to the bone racking up and overcharging unnecessary fees that suck up Sale Proceeds.

My question is why banks and lenders continue to loan money to these con artists, when they could have helped the poor homeowner stay in their own home.   Why because  "IT'S A RACKEET''.

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Maybe the FBI can get the FTC to something about Litton!
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