Feds look into mortgage fraud
Federal officials have started 151 criminal mortgage fraud cases since last October, according to a
New York Times story.
That number comes from a review by researchers at the Transactional Records Access Clearinghouse at Syracuse University, who looked at data from the Justice Department. The Justice Department only recently began tracking mortgage fraud, so the Syracuse researchers had no previous data to compare the current caseload with. So there’s no way to tell if the 151 criminal cases represents a big increase from previous years.
Half the cases are being run by the FBI, while the FDIC has undertaken about 25 percent of them.
Most of the federal cases are concentrated in certain areas of the country, including Florida, which accounts for a large chunk of the cases, California, New York, Ohio, Pennsylvania, and Vermont. Apparently the Pittsburgh area has produced the second highest amount of federal prosecutions, with 24 cases. Southern Florida has the most, with 69 federal prosecutions.
FBI investigators are also helping out with 1,400 other probes on the state and local level, which the FBI said is nearly double the number of cases they assisted with in 2005.
What do you think of federal investigators' efforts so far? Do you think federal officials should be doing the brunt of the investigating on mortgage fraud cases, or do you think local authorities should be handling prosecutions?
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hammer them... every Lenny mtg broker that sold their souls for a little cha-ching should be hammered.....
The question is "do you think local authorities should be handling prosecutions? "
from: Feds look into mortgage fraud..
We are experiencing a correction in the world economy and with that real estate values and prices have dropped ****temporarily****.
We have to look at history to see home values will and have increase in time.
The quick profit in the real estate market "flipping" is currently on hold.
Placing blame on one entity is difficult. However! Wall Street should not have been able to put mortgage products on the Street that were extremely dangerous.
Example: The old banking rule of thumb for qualifying for a mortgage was
28% over 36% . Meaning 28% of ones verifiable income would qualify for PITI=
Prin- Int - Tax & Home Owners Insurance -- 36% Would be for total debt to income = PITI plus any other debt (meaning debt that would be reflected on one's credit report- etc).
Qualifying ratio's have been put on the Street as high as 65% +++ This is dangerous.
Option arm mortgage programs that originally originated from California in which a teaser rate was offered at 1% or there about's was also a very dangerous mortgage product for the Average Joe. The mortgage program may have been good for the very sophisticated client that could invest there monies elsewhere for a profit.
Then there was the 100% to 125% ability of borrowing against ones home. WIth the thought that values would constantly increase and with that one could just refinance and consolidate there debt.
Then there came this temporary correction we are all experiencing and the poop hit the fan!!!!!
Pre Payment penalties also should have probably not been put on the Street nor accepted by an applicant.
Mortgages are like insurance they are risk based. When you take more risk you are treading in unchartered waters and you can sink very quickly.
We need to rethink the whole concept and realize that being somewhat conservative is very wise.... With that fixed rate mortgage's and some ARM's products such as a 5/1 -- 10/1 do not have the risk that a option arm or rate that can adjust a month after you close is way to risky for the Average Joe.
Fixed mortgage rates are still at an all time historical low and should be the the #1
mortgage for the majority of the USA. (conservative)
Real Estate values will go back up in time as history has shown us and with that if you plan on holding on to your property for say an example of 5yrs +.
I have to believe you will see your return in your home / investment.
With regards to prices in Ma and other high demand area's such a Ca they will always be that much more than other parts of the country - due to economics 101 supply & demand.
So with that some will need to move out to Central Mass - Western part of the State or other area's of the Country ---period--...
The Federal officals should focus in on Fannie Mae & Freddy Mac and more importantly WALL STREET and let the Local State Banking & Attorney Generals Office handle local business period......
Dana & Robin Bain
Why shouldn't the Feds be involved? Unless the mortgage was from a private money lender or single state lender; wouldn't a case of mortgage fraud involving a multi-state lender or repackaging the loan and reselling it across state lines clearly invovke the interstate commerce clause of the Constitution?
Further, in cases where the borrower inflated their income on a stated income or no-documentation loan the IRS should be consulted. Compare the stated income on the loan with the individuals tax return from the year of the loan. Clearly, if there is a difference, there is either mortgage fraud or tax fraud. Allow the individual to escape any fines or legal charges if they agree to pay income takes on the difference - which would help "keep people in their homes" (to use the popular idea that if you don't have a mortgage you're homeless) and provide increased revenue to the state and federal governement (which as the Boston Globe writes is on the decrease leading to jub and service cuts).
It should start on the state level, and then the feds will get involved when it's a big enough deal (as opposed to a single isolated instance of fraud - they won't have the time staff or budget for each and every instance.)
The problem is, they are all overwhelmed/understaffed.
Write/call your representative and tell them to author legislation that requires a fraud investigation any time there is a foreclosure on a subprime or stated income type of loan.
This blogger might want to review your comment before posting it.
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