“Why bother? You’ll never save them all”.
By Michael S. Richardsonwww.preventmortgagefraud.com
Author of “An American Epidemic, Mortgage Fraud… a Serious Business
As one can clearly see from this tidal wave of recent headlines (which themselves are revealing the mortgage fraud iceberg), mortgage fraud has been and is “persistent and growing.” As the current mortgage meltdown continues you will read more about how large of a role mortgage fraud has played in the foreclosures and that a large percentage of the homeowners do not really know how they were approved for the mortgage. While mortgage fraud obviously has been too big to curtail are we now going to begin preventing mortgage fraud. In this case, prevention begins not with millions, not with thousands, not with hundreds, but with one: one loan officer, one loan office, one mortgage company, one real estate agent, one credit reporting agency, one underwriter at a time.
Every part of the mortgage lending process presents another window of opportunity to unscrupulous loan originators, who by the very nature of their job description come in contact with builders, real estate agents, borrowers, processors, underwriters, appraisers, lender account reps, and title closers. Each one of these positions or areas of loan processing are needed to get a mortgage leaves an opportunity for fraud! As an industry it is now time to strengthen our pre-funding controls by re-training loan officers, processors, underwriters, the closing departments and a host of collateral employees who likewise have their fingers on the process of better detecting fraudulent loan applications and real estate transactions.
Most authorities will agree that the most effective method in preventing mortgage fraud is consistent regulation and licensing enforced by the appropriate authorities, but even if your state does not have strong regulations or laws or is in the process of implementing strong regulations, what really is needed is for the mortgage industry to rely enforcing a strong in-house, company quality control plan that includes both pre- and post-closing loans.
After all, it is your business or income whether you are an owner, loan officer processor, real estate agent, title companies or being paid to be involved in the transaction. Without proper enforcement, regulations are of almost no consequence. The latest industry statistics of “suspicious activities” filed within the mortgage industry is enormous, and of those only about two percent or less– that’s no typo, 2 % – were or are ever investigated. No wonder the fraudsters don’t fear retribution!However, the tide could be slowly changing…
There’s a story often told about a solitary man out taking a stroll on the beach. Eventually he comes upon a portion of the beach where millions of dying starfish have been washed upon the shore by an unusually high tide. The man is shocked by the sheer number of starfish and how many will perish because of Mother Nature’s folly.
As he continues walking he sees more and more starfish stretching as far as the eye can see. Step by step he becomes more convinced of the futility of it all. He begins to question his own mortality, and wonders if he and his vain attempts to find meaning in life aren’t a lot like all those starfish.
Finally he comes across a little boy who, much like himself, is confronted with the massive proportions of those millions of dying starfish. The two stand side by side, silently contemplating the holocaust. Finally, the boy reaches down to pick up a single starfish, flinging it out to sea.
The man snorts and says, “Why bother? You’ll never save them all. How can you possibly make a difference?” The boy shrugs, reaches down to grab up another starfish and, before flinging it out to sea says, “I can make a difference to this starfish.” Struck by the significance – not to mention the simplicity – of this statement, the man too reaches down to begin flinging starfish back into the sea, one by one.
Let our industry be like these two brave souls; not intimidated by the futility of facing fraud in our industry, but hearty enough to begin making a change in our own backyard, fighting fraudsters – one by one.
There’s no doubt that homeowners are paying the price of real estate fraud emotionally and monetarily as we have been reading non-stop about. The other price being paid is by the 10’s of thousands of honest mortgage professionals that have lost there job and the only way such costs can be avoided is to eliminate, or greatly reduce, the problem. That means you are going to have to start acting on mortgage at a different level, and acting about it soon. I can assure you the fraudsters are planning the next move and it is most likely FHA insured loans.
The ethical honest “Real Estate Industry Professionals” needs to step up today and assist the “American Homeowners” that are being victimized and assist our governmental agencies from these fraudsters, if you do not know how, educate yourself, and then educate the homeowners!
Where are the honest ethical Real Estate and Mortgage professionals?
When are the good, honest hard working professionals going to stand up and help put an end to these terrible crimes that fraudsters commit to steal homes from families.
"I am an industry veteran that is a victim of mortgage fraud and our industry is saturated with Willful Blindness, and an it is not my problem mind-set. I know that the current fraud-prevention measures have a higher cost of doing business The price of detecting, reporting, and preventing fraud costs all of us more money, but if I would have had the tools available today to prevent mortgage fraud I would still be running my business, not out of business. It is sad that in my travels and at speaking engagements around the country, I hear the same degrading comments about how unethical and crooked the Real Estate and Mortgage Industry has become at numerous levels". Says Michael S. Richardson Managing Director of www.preventmortgagefraud.com
In the last few weeks I have received many desperate e-mails from homeowners that have been scammed out of their homes by Real Estate Agents, Attorneys and Lenders. The scheme is these fraudsters pretend they are going to help the homeowner save their home by doing a refinance of the home to catch up on payments or to make major repairs needed on the property. This fraud scheme has surfaced in many different states with the same results to the homeowner. The result is a transfer of ownership not a refinance as they were advised, and while they did the paper shuffle at the closing the sale of the property occurs! The transfer ownership turns out to be an immediate eviction notice to these families so the fraudsters can skim the equity from the property, not caring who they hurt!
In one case from New Mexico the homeowner wrote: "One week later they re-keyed the house while I was gone, after the re-key they put a dumpster in the driveway and proceeded to throw everything we own from the house into the dumpster with the workers telling my daughter's boyfriend they were trying to figure out what to auction off." In a second case from Las Vegas they wrote: "The investor then (1) changed the locks at our home, (and barred our windows resulting in three broken blinds that can be seen from the street and screwed a wood bar into the garage door frame on either side;) (2)"gutted" our house of all our personal household belongings which are presently in two 40yard dumpsters in the backyard of the residence due to be removed and disposed of within one or two days of the date of this letter 9/26/06" There is a current and repeated pattern of behavior for this organized conspiracy of real estate agent, broker, investor, the real estate company, and the title company and or its closing agent.
There are companies teaching and even writing books on how to use these exact same illegal tactics. Some of these students are taught to believe it is a legal way in the communities to make huge profits. Unfortunately the conspiracy is just a way to commit mortgage fraud, equity skimming, and predatory lending by bullying and using aggressive tactics to impose their illegal actions. The tactic is to embarrass and humiliate the homeowner to the point that the homeowners give up in exhaustion. They concede to the terms due to emotional need to have financial situation fixed, save their home, only to find out later that they were scammed while they were in desperate circumstances. Although this is a very upsetting and a sad situation for anyone to even think about, imagine what the two families above are dealing with as they are living this nightmare! The vast majority of people are sincere, motivated, dedicated individuals making one of life's most costly purchases. No matter how sophisticated a homeowner may be in his or her professional life, they are most often baffled by the endless forms, facts, and figures they must face simply to apply for the loan, let alone be approved for it and go to the closing table. Thus the homeowner is unwittingly the first to allow for fraud, and the last to know about it.
We know that fraud exists, we know who most likely perpetrates it and, in fact, the various ways in which they commit fraud. But how is the consumer to know, how is the potential homeowner, affected? Imagine the two family's situation above, not only losing their home, but all of their personal possessions as well. These people would not only like to have their own homes back but have told me they feel that there is a responsibility of honest professionals, friends, neighbors and the community to all do our part to eliminate these "Fraudsters". We need to prevent mortgage fraud, equity skimming, and predatory lending practices.
Why do we consistently allow these types of fraudsters to affect elderly people who have nearly paid off their mortgages, veterans, legal immigrants, those below poverty level income, young couples with infants and small children, and people who just have the American Dream of owing their home. The majority of people believe it is the responsibility of our local, state and national governmental agencies' to protect the American public from deceitful, fraudulent, dishonest, larcenous, embezzlement, unethical and misrepresentative practices related to real estate and mortgage fraud. The costs are significant at the local level, like inflated appraisals, they really drive up the property taxes in a neighborhood or county. A lot of communities across the country have seen their neighborhood prices distressed and sometimes become a blight because of real estate fraud.
What about the bigger picture on the national level, you know when the government gets involved in a problem, not only is it big but very costly. Someone has to pay those agents to track down fraud, someone has to pay to the court costs all those fraudsters, and if convicted someone has to pay to feed, clothe, and shelter them. Who? Who will bear the brunt of these costs? You, me, and millions of unwitting homeowners who would never think of committing real estate fraud or even know how to go about committing fraud. There's no doubt that homeowners pay the price of real estate fraud emotionally and monetarily. The only way such costs can be avoided is to eliminate, or greatly reduce, the problem. That means you are going to have to start thinking about it, and thinking about it soon.
The ethical honest "Real Estate Industry Professionals" need to step up and assist the "American Homeowners" that are being victimized and assist our governmental agencies from these fraudsters, if you do not know how, educate yourself, and then educate the homeowners! The faster we all help prevent real estate fraud, the sooner all of these costs could be reduced, thus saving homeowners and tax payers money … and people will not be unlawfully evicted from there homes because of the paper work shuffle by the fraudsters at the closing table. We can prevent mortgage and real estate fraud one transaction at a time! Preventmortgagefraud.com
