The Mortgage Man

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Justice Department Mortgage Fraud Investigation

Today, the FBI and the Justice Department announced “Operation Malicious Mortgage” netted a total 144 fraud cases and 406 defendants in a nationwide mortgage fraud sweep.

This is not a tremendous shock as it has been discussed for months who is to blame for the subprime meltdown and credit crisis.  Mortgage fraud was a contributing factor to today’s current real estate and mortgage market, but it wasn’t the only factor.  I would also go so far as to say it is not even the most significant.

Much of what was created in the mortgage and real estate market has to do with the over zealous loosening of underwriting criteria for the sake of increasing profits in an incredibly competitive market.  This same competitive atmosphere, I’m sure, had an affect on those in the industry that saw the need to cross the line to get a loan done.

Personally, as a mortgage banker and a licensed mortgage broker for 11 years, I see 2 different sides to this “clean sweep” by the Justice Department.  On the one hand, unscrupulous mortgage originators give a black eye to all of the hard working honest mortgage professionals that try to do the right thing and coach their borrowers on what is the best possible option for their financial situation.  On the other hand, there is no shortage of borrowers that believe that it is some sort of birth right to own a home, and they will pursue it at all costs, even when they can’t afford it, or it doesn’t make financial sense.

I hope that those mortgage insiders that participated in predatory practices with malicious intent see punishment for their actions.  But, I also fear that there will be innocent victims that get caught up in the government “dragnet” as well.  It should be interesting to see how it plays out.

Here is a link to the full story posted on the Department Of Justice website.

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2 Comments»

  Foreclosure Doctor wrote @

Great post! I agree that predatory lending was a huge factor to the crisis in our economy today. I believe it does give a false impression that all Mortgage Brokers are like this, which is too bad. I really hope the department of justice will come down hard on these lenders and come up with a way to prevent it from happening in the future.

  Chucky wrote @

What a great blog..
Thank you guy..

You should check mine..
http://www.trifter.com/Asia-&-Pacific/Turkey/Travel-to-Patara.119159


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