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The June 2011 edition of Secondary Marketing Executive cover story “Mortgage Fraud is Alive and Well” was definitely an eye catcher. However after reading the article by Kevin Coop, the headline should have read “Real Estate Fraud is Alive and Well”.
Mr. Coop’s comments on fraud have more to do with naïve home owners and unscrupulous individuals. Let’s not forget the real estate agents who actively seek short sale properties. To stop real estate fraud we have seen many new laws enacted. Unfortunately Dodd-Frank and so far the new CFPB do not address the underlying problems. In addition, real estate agents have been given a pass. They do not have any restrictions on their income and they can still conduct blind bidding on homes. This coupled with the government’s desire to help home owners through mortgage modifications has created this illegal cottage industry. The mortgage industry is tired of being the whipping boy for current housing problem
As a loan originator, even the most simple mortgage transaction turns into the Great Paper Chase. Every document is checked and rechecked at origination and again at the investor level. Today a loan file at closing resembles the Manhattan
The era of simple contracts has come to an end. The excesses of the past decade has forced it on us. There was a time when the bank agreed to the loan and carried it on their books to completion of the contract. The more actors, the greater the opportunity for fraud. We are all diminished.
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