Fertile Fields for Foreclosure Fraudsters
Instead of taking advantage of lax lending rules, mortgage fraudsters have switched gears. Now, they’re are taking advantage of the foreclosure market. There is one common thread; lax of oversight.
Palm Coast, FL – June 23, 2011 – During the real estate boom, most mortgage fraud centered on the fact that there were so many new mortgage originations. Wall Street’s un-sated lust for more and more mortgages, regardless of quality, created a target rich environment for crooks. Lenders weren’t watching because they simply didn’t care. Their job was to put lipstick on the mortgage pigs and repackage them as high-quality residential mortgage backed securities. Regulators were overwhelmed.
Times have changed. The flow of mortgages has reversed as lenders try to rid themselves of their bloated toxic loan inventory. The sheer volume of problem loans has again swamped the system to the benefit of those who thrive by living on the wrong side of the law.
Crooks who once profited by originating mortgages filled with misrepresentations have simply switched hats. They’re marketing themselves as foreclosure rescue experts. This scam works because distressed property owners are frustrated by the lack of communications from their lenders. Stories abound of homeowners waiting on hold for hours, talking to a different lender representative each time they call, resubmitting lost paperwork again and again, or simply being ignored. They become ripe targets for someone who tells them that they can make the pain go away. A sure tipoff is a demand for payment in advance of services.
Lenders often initiate foreclosures but go no further for months or even years, leaving homes in limbo and often vacant. Clever fraudsters have moved into this opportunity by creating phony loan satisfaction documents, then selling the home to unwary buyers. Vacant homes are also exposed to rental scams or squatters. Thieves break into vacant homes to steal appliances, fixtures, and recyclable materials.
Not too long ago, lenders’ loss mitigation departments were small. Now large lenders have call centers full of low-paid inexperienced workers managing the foreclosure paperwork mill. Their motivation is to move each piece of paperwork off their desk to the next person. The result is a low level of oversight. Read "4 from Minn., Wis. charged in mortgage scheme."
Recent governmental action against banks and Wall Street investment companies have make headlines, but the fine amounts, though they seem large (in the hundreds of millions) are paltry compared to the magnitude of the financial meltdown and collapse in the housing sector. Read JPMorgan Chase Fined $154 million in Goldman-Like Case. And still nobody has gone to jail. And who’s paying for it? We taxpayers are.
Still Crooks…
Toby…..you dont know how close to the truth this is…..these former mortgage guys and gals are scouring the land looking to "help" people underwater on a mortgage they probably bought from one of the crooks….who knew when they sold it to them they were going to fail…and as you say in your summary, no one has of yet been punished…..add this component to all the other problems we have in this country….we are doomed….