HomeLatest NewsFeatured HomebuildersHome Buyer ResourcesBinding ArbitrationResource LinksSubmit ComplaintsView ComplaintsTake Action 101!Report Mortgage FraudMortgage Fraud NewsForeclosure NewsConstruction DefectsHome DefectsPhoto GalleryFoundation ProblemsHomeowner Website LinksHOA Reform
Main Menu
Latest News
Featured Homebuilders
Home Buyer Resources
Binding Arbitration
Resource Links
Submit Complaints
View Complaints
Take Action 101!
Report Mortgage Fraud
Mortgage Fraud News
Foreclosure News
Construction Defects
Home Defects
Photo Gallery
Foundation Problems
Homeowner Website Links
HOA Reform
Featured Topics
Builder Death Spiral
Report Mortgage Fraud
Foreclosure Special Report
Mold & New Home Guide
Special News Reports
Centex & Habitability
How Fast Can They Build Them?
TRCC Editorial
Texas TRCC Scandal
Texas Watch - Tell Lawmakers
TRCC Recommendations
Sandra Bullock
People's Lawyer
Prevent Nightmare Homes
Choice Homes
Smart Money
Weekly Update Message
Latest News
New Jersey
New Jersey & Texas
Write Letters to the Editors
TRCC in the News
Texas TRCC Scandal
Fair Use Notice
HOBB Archives
About HOBB
Contact Us
Fair Use Notice
Legislative Work
Your House

 HOBB News Alerts
and Updates

Click Here to Subscribe

Support HOBB - Become a Sustaining Member
Who's Online
ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
Denver Post - Foreclosure Series
Monday, 04 September 2006

Fraudulent FHA loans breaking brokers
Statewide, the FHA reports 337 claims against its insurance fund on Colorado home loans issued in the past two years. One-fourth were originated by just four small Denver-area firms: Primero LLC, Alliance Mortgage Capital Inc., International Lending Solutions Inc. and Creative Mortgage Inc.

Denver Post - Foreclosing on the American Dream
Fraudulent FHA loans breaking brokers
Despite passing federal tests, four Denver firms were infiltrated by fraud and ended up dissolving.

By David Olinger
Denver Post Staff Writer

A small number of mortgage brokers account for a large number of Federal Housing Administration loan foreclosures in Colorado.

Statewide, the FHA reports 337 claims against its insurance fund on Colorado home loans issued in the past two years. One-fourth were originated by just four small Denver-area firms: Primero LLC, Alliance Mortgage Capital Inc., International Lending Solutions Inc. and Creative Mortgage Inc.

All passed what federal officials call a rigorous application process for the right to originate federally insured loans.

Because of their extraordinary default rates, the Denver FHA field office terminated Creative Mortgage and International Lending Solutions just before both companies dissolved this year. It terminated Alliance Mortgage Capital two months before that company dissolved last year.

Primero's owner, Michael Richardson, said his business was effectively closed by December 2004 - six months before the Denver field office terminated its right to approve FHA loans.

"My company got infiltrated by a mortgage-fraud ring," he said. "In about seven months, they did enough damage to me to put me out of business."

Richardson said he fired five employees in one day after discovering they had been recruited by a man who supplied false loan-application information - Social Security numbers, driver's licenses, pay stubs - to qualify buyers for homes.

"Anything that particular borrower was missing, they'd fix it," he said.

Richardson, who had been in the mortgage business for 26 years, wrote a book on mortgage fraud, "An American Epidemic," and is trying to launch a new career as a fraud-prevention expert.

He said the people who ruined Primero and put many buyers in homes they could not afford have not yet been charged with any crime.

"I'm out of business. Two-and-a-half years later, they're still committing fraud every day," he said.

The FHA is an agency of the U.S. Department of Housing and Urban Development, which has a website that tracks the performance of federally insured loans. That website, Neighborhood Watch, shows Primero loans are defaulting more than seven times as often as other FHA loans in Colorado.

Alliance Mortgage Capital loans are defaulting at 654 percent of the state average, International Lending Solutions loans at 577 percent and Creative Mortgage Loans at 431 percent. The owners of Alliance, International Lending and Creative Mortgage could not be reached for comment.

Forty-one percent of Primero's FHA loans defaulted - or at least three months overdue - within the first year.

HUD officials say they review loan originators' default rates every three months, and their response to mortgage brokers with bad track records has been timely.

"Our view is HUD has handled the situation properly," said John Carson, HUD's regional director in Denver.

FHA loans originated by an Aurora mortgage broker, Applewood Finance Corp., have defaulted at 304 percent of the state average. Its owner, Howard Hill, said he voluntarily gave up his FHA privileges this year. He blames the borrowers, not the loans.

HUD's Carson said the agency systematically evaluates risk "on a per-lender basis. We look at the foreclosure and default rate by lender. We rely upon lenders to evaluate risk based on actual data such as credit scores."

Computer-assisted reporting editor Jeffrey A. Roberts contributed to this report.

< Prev   Next >
Search HOBB.org

Reckless Endangerment

Outsized Ambition, Greed and
Corruption Led to
Economic Armageddon

Barnes & Noble

Rise and Fall of Predatory Lending and Housing

NY Times: Building Flawed American Dreams 
Read CATO Institute: 
HUD Scandals

Listen to NPR:
Reckless Endangerman
Gretchen Morgenson : How 'Reckless' Greed Contributed
to Financial Crisis - Fannie Mae

NPR Special Report
Part I Listen Now
Perry Home - No Warranty 
Part II Listen Now
Texas Favors Builders

Washington Post
The housing bubble, in four chapters
BusinessWeek Special Reports
Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Texas Regulates Homebuyers
Texas Comptroller Condemns TRCC Builder Protection Agency
TRCC is the punishment phase of homeownership in Texas

HOBB Update Messages

Consumer Affairs Builder Complaints

As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

TRCC from Bad to Worse
Case of the Crooked House

The Pat and Bob Egert Building & TRCC Experience 

Builders Looking for Federal Handouts

Build it right the first time
An interview with Janet Ahmad

Bad Binding Arbitration Experience?
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
or call 1-210-402-6800

Drum Major Institute
for Public Policy

Tort Deform
Report Your Arbitration Experience

Homebuilding Texas Style
And the walls came
tumblin' down

 Texas Homebuilder
Bob Perry Political Contributions

  The Agency Bob Perry Built
 TRCC Connection News
Tort Reform

NPR Interview - Perry's
Political influence movement.
Click to listen 


Have you seen any of these individuals

 Feature: Mother Jones Magazine
Are you Next?
People Magazine - Jordan Fogal fights back
Because of construction defects Jordanís Tremont Home is uninhabitable
You could be the next victim
Interview with Award Winning Author Jordan Fogal

Special Money Report
Big Money and Shoddy Construction:Texas Home Buyers Left Out in the Cold
Read More
Read Report: Big Money…
Home Builder Money Source of Influence

Letters to the Editor
Write your letters to the Editor

Homeowner Websites

top of page

© 2022 HomeOwners for Better Building
Joomla! is Free Software released under the GNU/GPL License.