“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!
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