Archive for the 'Loan Fraud' Category
Is This the End of Credit Score Piggybacking?
You may be familiar with the credit improvement trick of piggy-backing on someone else’s good credit to improve low Fico scores. Usually this is done to build scores for a son or daughter with no credit or to rebuild credit for someone who has had problems.
I feel dumb for being even a little surprised that there are on-line businesses encouraging and facilitating the use of this tactic—and worse—between complete strangers to game credit scores and defraud lenders. See the Mortgage Fraud Blog’s post for a good analysis of the problem.
Here’s another article I saw today, apparently one of many that appeared last weekend on this topic. The bottom line is that this tool is about to be shut down because of abuse. Don’t blame the mortgage industry for this one. It’s like drugs. The fundamental problem is demand.
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It’s not that I want to keep beating the mortgage fraud drum, it just keeps falling into my lap.
Furthermore, I figured that as a mortgage broker with almost two decades of experience, I could easily steer clear of trouble. After all, if I can’t recognize mortgage fraud, who can?
But today I learned a double lesson. Mortgage brokers and FSBO sellers are both at risk of getting caught up in mortgage fraud. Without even knowing.
What happened?
This morning, a woman called in and asked to speak with “the broker”. Hmmm….sounds like trouble. Although reluctant at first to explain, she finally spilled the beans. Here’s what unfolded.
Mortgage fraud is no longer the playground of two bit, school yard con artists. The pros are in the game If he were here today, Vito Corleone might have found it irresistible. I find it frightening.
Apparently, there was an FBI conference in Las Vegas on the subject in December. I ran into this yesterday from National Mortgage News Online….
Fraud Stats Confirm Fears
LAS VEGAS–The latest statistics from the Federal Bureau of Investigation confirm that mortgage fraud is on the upswing.
“We can’t find a chart that doesn’t show up in a big way,” special agent Bill Stern said at the Mortgage Fraud Conference here last week.
Rachel Dollar is Santa Rosa attorney and Certified Mortgage Banker who handles fraud recovery and litigation for lenders and capital market investors. She is current President of the Sonoma County Bar and in 2005 was voted one of the 100 most influential people in real estate.
However, she is probably best known—at least to industry bloggers and those who commit loan fraud—for her highly popular Mortgage Fraud Blog, a must-read for those interested in the mortgage industry’s dirtiest laundry. If you want to see how ugly this fraud thing is getting, check it out.
So first, it was announced last December that Rachel had joined the law firm of Lanahan & Reilley LLP as a partner to chair their Mortgage Banking Group. Second, her Mortgage Fraud Blog recently won 2nd place in the best overall real estate blog category in the 2007 REBAs at HousingWire, another excellent mortgage blogsite.
Great job Rachel! I just wanted to say thanks.
You may have seen Bob Shallit’s recent Sacramento Bee article highlighting Sacramento Area Flippers in Trouble. This is a local real estate blog that lists 470 area homes purchased in the last two years and now relisted at prices much lower than those paid.
I’m familiar with this blog, so Shallit’s article was not a revelation. But one particular paragraph caught my eye. Regarding flips gone bad, a local Realtor is quoted saying “many sellers won’t bear the full brunt of the loss. That’s because lenders sometimes agree to forgive whatever debt remains after a house is sold to save themselves the costs of a foreclosure.” Okay, that just sounds too pretty, too…forgiving. Would you like to know how it really looks ?
Here is a true story of one recent Sacramento flipper in trouble.
I Swear Your Honor, I Didn’t Know It Was Loan Fraud!
How would you feel if you found out you had committed mortgage loan fraud and now faced serious consequences?
A frequent scenario.
Let’s imagine that you want to buy a home but have no money for a down payment or closing costs. Let’s also imagine that you have some credit card debt you’d like to “roll into the loan” and the house you want to buy needs a little sprucing up.