Florida Leads Nation In Mortgage Fraud

Florida led the nation in mortgage fraud in 2007, a dubious distinction it's had two years running.

The competition to be first in fraud is getting stiffer as the housing downturn persists and agencies nationwide report more suspect mortgages, according to industry data released Thursday.

Nevada ranked second in mortgage fraud, up from No. 6 a year earlier in the Mortgage Asset Research Institute's annual report on fraudulent mortgage activity. It was followed by Michigan, California, Utah and Georgia. Virginia made its debut on the report's top 10 list, coming in at No. 7.

The report, released at a Mortgage Bankers Association conference in Chicago, did not detail the exact number of fraud cases by state or nationwide. Instead, the group calculated a "fraud index" by comparing fraud reports with the number of home loans made in each state.

It cited FBI statistics showing 46,700 mortgage fraud reports in 2007, a more than 30 percent increase from the year before and twice as many than in 2000. Federally insured lenders are required to report fraud to the government.

Mortgage fraud has represented about $1 billion in losses over the past decade, the Mortgage Bankers Association said.

Common kinds of mortgage fraud include misrepresentations of income, employment history, and falsified tax returns or financial statements .

David Kittle, chairman of the mortgage bankers' group and chief executive of Principle Wholesale Lending in Louisville, Ky., said the industry does not blame borrowers alone for committing fraud. He said real estate agents, mortgage brokers, builders and lenders all share responsibility for a climate of lax standards that has now ended.

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"There's enough responsibility to go around to everybody," he said in a conference call with reporters.

The Mortgage Bankers Association is calling for more than $31 million over the next five years in new funding for the FBI and Justice Department to fight mortgage fraud, money that would go to new investigators and prosecutors.

The report came from an industrywide database that includes information about fraud and fraud allegations collected from approximately 700 mortgage companies ranging from finance giants Fannie Mae and Freddie Mac to midsize lenders.

Merle Sharick, a vice president with ChoicePoint Inc., which owns the Mortgage Asset Research Institute, said fraud has become more evident now that the industry is examining loans in foreclosure and default. "When times are good and the market is roaring, fraud is not as evident," he said.

Sharick also noted that the industry has traditionally worried more about organized schemes to defraud lenders, rather than borrowers misrepresenting their income. But now, with property values falling "a lot more instances" of fraud committed by borrowers who were simply stretching to buy bigger homes and are now stuck with properties they can't afford.

Comments

[themodernleader]

Escapee and tator. Escapee, you are right and righteous and a good American for sharing this information. Spitzer was courageous and no other corrupt media mentioned a word of the facts and issues he raised. Thank you for the information and insight.
tator, I came from the farm. And I grew up in poverty. As an American born immigrant I came to the big city and toiled and studied and learned. And I have tried to have given back as much I have been given.
The battle between the primitive and rational competences of the American people is taking place in our cities. And the contest for empirically based, historically founded , experencially learned decision making appears to be losing our to the claims of the wisdom emanating from unhinged power and the inspiration originated knowledge of our citizens, encouraged by powerful interests with hidden agendas.. tator, the battle for America's future resides not in the idyllic pasture of a peaceful meadow but the give and take of ideas in the ascending or descending cities of our land. Our fate is in the success or failure of organizations making-up our great cities .

[MACS]

.
Why would anyone be surprized an the highest foreclosure rate with the unregulated fiscal industry as a function of a repub-LIE-CON governor and legislature.
.

[bluesnot]

Compliments of Jeb Bush! He was tight with developers.

[castlerider]

Everyone with a brain knows Interests Rates right now, at this moment, need to be at 10. At least 8 !
This would bring MASSIVE amounts of investment in to our nation's infrastructure, and bring back the strength of the dollar very quickly..
However, we are in a stranglehold because to do such a thing would devastate home ownership with all the problems we're facing in the housing sector.

So why aren't we considering freezing interest rates on all businesses and residential property for at least 2 years, allowing buyers to buy at current rates for 3 to 6 more months when at which time, on a certain day, rates will be set to climb to the higher mark.. All buyers who bought before then could lock in or keep those rates Yes, we would be manipulating the rates, but so what? This would bring in MASSIVE amounts of purchasing before the deadline. Buyers everywhere sitting on a fence before they decide to buy would get the hell off! Some regulations will need to be in place so the system will not be abused by greedy investors and speculators, but that could be easily enough applied. The intensely strong flow of cash being spent so they could be getting these rates while they could, would spike our local economies almost everywhere as well.

This is just the kind of hands-on action Bush would never have the balls to take on.
It may sound a bit drastic, but as far as moving big amounts of hard cold CASH for serious investments it would work, and drastic times call for drastic measures.

[themodernleader]

Thank you, Lucky7. You are a patriotic American for exposing the truth. And since corruption emanates from the top, "ethically-challenged", that is, dishonest, fraudulent driven individuals receive leadership positions for their corrupt behavior. Rewarding illegality and unethical management is the mark of traditional leadership. Modern leadership was our distinguishing feature until the age of Reagan and unrestrained individualism in control of our economic destiny. Now, the Bush administration has combined unfettered capitalism, incompetence and massive corruption towards an abyss that may proclaim the return of humanity's savior, as was foretold 2000 years ago. No doubt the perpetuators of our present predicament will attempt to buy and bribe themselves into the graces of the self apppointed savior while the rest of us pray for a short stay to a futureless life.

[BigBagel]

But Florida is part of Jesusland. I don't get it.

[WorkingClass]

Here in Louisiana we love Florida. They make us look good.

[bryangalt]

The blame game is always fun, but the funny thing about it is that no one likes to put the blame where it belongs which is on all of us. We collectively stood by as the prices of homes skyrocketed and no one complained about it then did we? At least 50.1% of our fellow citizens were so stunningly uninformed that they re-elected GWB, who's policies and practices have helped to exacerbate this situation to the point that it could be possible for us to slip into a deep-recession or even depression similar to the 1930's.
So who's to blame for our woe's? We are. The agencies that oversee the economy are headed by the same low-IQ, money grubbing people that GWB appointted to help bring on this mess, aided of course by the public lack of interest in the fact that the Republican's have been gutting the safeguards of our financial systems to help the super rich get even richer, while people across America are being told that its their fault they can't afford their mortgages anymore, better start packin'.

[GBecker]

Restructure. Revote. Cut 'em loose and let 'em float away already.

[sparkey]

I sure would like the government to bail me out when I get deep in debt. Course ,I also didn't pay millions to members of congress and the senate so they would bail me out.

[Tom95134]

A nice Republican State with a Nice Republican controlled Legislature and all those nice Republican retirees loosing their homes. So let the nice Republican president bail them out. (Or will they wait for the Democrat to get elected and then scream their heads off about the government not stepping in to help homeowners?)

Sell the whole damn state to Cuba.

[mediamarv]

Florida led the nation in mortgage fraud in 2007.. among many other frauds!!

[PacificGatePost]

BOARDROOMS ARE IN URGENT NEED OF RESTRUCTURING

While rooting out the fraud and tax payers do some "bailing out", could we look at making some serious changes at the top of the corporate food chain.

"WE THE SHAREHOLDERS OF YOUR COMPANIES......

http://pacificgatepost.blogspot.com/2008/03/letter-to-ceos-of-fortune-1000-cos.html


TIme for bloggers to take action.... spread the word.

[Tom95134]

RESTRUCTURING?

Why? So those bastards that created this mess can get their multi-million dollare golden parachutes and go off to live the good life at our expense?

You can restruecture them right into a Federal Prison. Maybe Bush, who could look into Putin's eyes can arrange for them to get sent to some nice Gulag in Russia.

[forpeace]

*

How about Voter Fraud?!

*

[speakingtruth2power]

Coincidentally, Florida also leads the country in voter fraud!

One has to wonder if Florida is not the future for US all!!!!!!!!

[escapee]

On Feb 14th, 2008, Gov. Spitzer wrote a ball-busting op-ed in the Washington Post about the Bush Administration's fight against states wanting to pass laws that would protect consumers from predatory lenders. In it he wrote the following:

"Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers."

Notice the date Spitzer wrote the op-ed..... Bush's real desire for unwarranted wire-tapping is starting to look more like a tool against his personal enemies and less like a way to stop terrorism!

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html?hpid=opinionsbox1

[WIpatriot]

Did anyone think otherwise?

[escapee]

Well, actually, the media doesn't seem to think at all.

[WorkingClass]

So thats the Spitzer story? Thanks escapee. If you want to know the truth about anything you have to dig thru anonymous comments until you find it. Big brother wants us poor, scared and ignorant.

[MovingtoNorway]

If you don't want to learn Norweigan or Icelandic, move to Minnesota or the Dakotas. Cold, but free of these weasel scum bags in the Sun Belt. You can always vacation down south.

[GnitenGoodLk]

I have so many friends who have moved to Europe the past two years. It is unbelievable. I'm considering moving as well.

[WIpatriot]

A couple of people I know are considering Costa Rica, GN. Mrs. Patriot keeps suggesting Italy (she's Italian) but I'm the 'fight back' kind and want to stay. Don't want to leave the grandson here alone....

[Tator]

Actually, all you have to do is to move out of the cites. Out in the country life is just fine. Land is cheap, property taxes are low, housing is cheap (buy ten acres and and park a mobile home on it then saving money is easy), the air is clean , the water is clean, are schools actually work and provide a real education. Crime is almost non-existent, few lock their doors.

Liberals suffer from a psychologcal problem similar to the "herd mentality", they HAVE to have people all around them to feel whole. That is why so many live in the cesspools of cities.

Think about it. Why would anyone who claims to "love nature" live in such high polluting, crime ridden, taxed all to be *amned, no privacy, massive C02 generating, failed schools, dirty air where their only exposure to "nature" is a walk in an artificial park or a visit to a zoo to see animals.

Only people who are a little nuts would elect to live in such deplorable conditions. Most of use out here in the country fell sorry for Liberals with such low self esteem, but they if they had any brains and courage they would move out here and ruin our world like they have their own.

[BigBagel]

Only liberals live in cities??????

[almoguy]

Tator about the only thing I can agree with you on is that country life is just fine. The rest of your rant is just so much bullshit. I am a "liberal" and have lived in rural areas for the last 37 years. The only "herd mentality" I have witness is in the church crowd that populates rural areas...you know where gay marriage is such a huge threat and forget about privacy as the only thing you "conservatives" are interested in is what goes on in other peoples bedrooms. Your redneck babble lacks any true understanding of Liberty and community responsibility. My neighbors look after each other. I think they would cast their eye on you with one raised eyebrow. Get back to your cave weasel!

[Xander]

You know what really bakes me about this?

The REASON for most of the mortgage fraud are the lenders themselves. I know a number of people who bought into houses they shouldn't have been able to be approved for, with a payment increase after 2 years they had no hope of being able to pay--and the reason they got the house was because the lender TOLD them to lie on the application. Flat-out said that it's OK, it's no big deal. And the way they rationalized and justified this was by writing up the loan for more than the house was worth in the first place and actually PAYING the borrower tens of thousands of dollars to buy the house.

And now what's happening? The government is gonna hire prosecutors and investigators and is going to go out and try to lock up otherwise decent people who did this because they were told it was OK, just so the mortgage company could get the commission.

[escapee]

Many were told not to worry when the rate jumps up, just refinance!