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
Home
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
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
We have 1 guest online
ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
Realty Times - Mortgage Fraud
Tuesday, 29 March 2005
Mortgage Fraud Remedies Proposed
In an effort to take a bite out of the growing crime spree in mortgage fraud, federal regulators proposed this week that mortgage mammoths, Fannie Mae and Freddie Mac promptly report real and suspected mortgage fraud and create the internal control systems to detect the financial scourge.

Realty Times
Mortgage Fraud Remedies Proposed

by Broderick Perkins
In an effort to take a bite out of the growing crime spree in mortgage fraud, federal regulators proposed this week that mortgage mammoths, Fannie Mae and Freddie Mac promptly report real and suspected mortgage fraud and create the internal control systems to detect the financial scourge.

The proposal, from the Office of Federal Housing Enterprise Oversight (OFHEO), an independent agency within the U.S. Department of Housing and Urban Development (HUD), cites a case involving Fannie Mae which, in December, consented to hand over some $7.5 million in an agreement with the U.S. Justice Department.

The Justice Department had accused Fannie Mae of accepting money it knew had been lost by Government National Mortgage Association (Ginnie Mae) in a fraud scheme involving First Beneficial Mortgage Corp, Olympia Mortgage Corp, and United Homes LLC.

Fannie Mae, which is the second-largest U.S. financial institution behind Citigroup, did not admit wrongdoing in the consent order.

"This and other frauds in the mortgage industry reflect the need to deter and, if necessary, detect and remedy fraud," the proposal says.

Among other tasks, the OFHEO, regulates two government-sponsored enterprises (GSEs) -- the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).

Attracted by the run up in home prices and acting with growing impudence, an underworld of grifters have spawned a pandemic of mortgage fraud in the United States.

The Federal Bureau of Investigations received 17,127 reports of mortgage fraud in the fiscal year that ended Sept. 30, 2004, compared to only 6,936 reports in the previous fiscal year. A Google search of current news articles on the morning of Feb. 23 revealed 120 hits for current news stories about "mortgage fraud."

The proposal identifies mortgage fraud, a close cousin to predatory lending, as "a material misstatement, misrepresentation, or omission relied upon by an Enterprise (GSE) to fund or purchase -- or not to fund or purchase -- a mortgage, mortgage backed security, or similar financial instrument."

The FBI says 80 percent of all reported fraud losses involve collaboration or collusion by industry insiders -- lawyers, appraisers, mortgage lenders, title and escrow workers, mortgage brokers and real estate agents --who conspire to get mortgages for more than the actual value of the property and then walk off with the difference. Often, the scam includes inflated appraisals on properties distant lending companies never see.

OFHEO's proposal says GSEs must notify OFHEO if the GSE is requiring the repurchase of a mortgage backed security or other instrument, or if it is declining to purchase an instrument because of suspected fraud.

Failure to comply would subject a GSE or its board members, officers, or employees to supervisory actions by OFHEO, including the issuance of cease-and-desist proceedings and monetary penalties.

There is a 30 day public hearing period before the proposal likely becomes a regulatory mandate.

The OFHEO also issued a separate advisory, requiring the GSEs to notify OFHEO of investigations, legal proceedings, or civil or criminal actions by any governmental authority or private party. The advisory, effective immediately, details the establishment of procedures and deadlines for making such notifications.

"Filing of a knowingly false or misleading report or failure to report the occurrence of an event in accordance with this advisory may subject the Enterprise and its board members and any responsible officer to supervisory action," the advisory says.

To learn how you can avoid being defrauded see "Mortgage Fraud Inflates Housing Bubbles".

Related Articles:

  • Mortgage Fraud Inflates Housing Bubbles
  • U.S. Treasury Takes Steps To Lessen Coercion Of Appraisers To Inflate Appraisals
  • The Appraisal Crisis And The FBI
  • Scam Artists Target Overburdened Debtors
  • Early Detection Of Mortgage Fraud
  • Fraud and Flexibility Associated With Mortgages
  • States Working to Uncover Lending Abuses
  • States Act to Curb Lending Abuses
  • Mortgage Bankers Begin Self-Police Campaign
  • Computer-Savvy Criminals Increasingly Turn To Mortgage Fraud
  • Nosy Lender Questions Help Curtail Mortgage Fraud
  • Court Settlement Teaches Mortgage Caveats
  •  
    < Prev   Next >
    Search HOBB.org

    Reckless Endangerment
    BY: GRETCHEN MORGENSON
    and JOSHUA ROSNER

    Outsized Ambition, Greed and
    Corruption Led to
    Economic Armageddon


    Amazon
    Barnes & Noble

     Feature
    Rise and Fall of Predatory Lending and Housing

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

    Listen to NPR:
    Reckless Endangerman
    by
    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

    Consumer Affairs Builder Complaints

    IS YOUR STATE NEXT?
    As Goes Texas So Goes the Nation
    Knowledge and Financial Responsibility are still Optional for Texas Home Builders

    OUTSTANDING FOX4 REPORT
    TRCC from Bad to Worse
    Case of the Crooked House

    TRCC AN ARRESTING EXPERIENCE
    The Pat and Bob Egert Building & TRCC Experience 

    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

    top of page

    © 2017 HomeOwners for Better Building
    Joomla! is Free Software released under the GNU/GPL License.