Mortgage Fraud – Oxymoron
I’ve had the recent pleasure of reconnecting with several old friends. Today, I had an email from Michael Richardson, the former owner of a mortgage company, who now owns a company that investigates mortgage fraud. Michael has witnessed what this insidious crime can do from both sides of the fence, and is highly respected for his knowledge and ethics.
Thoughts from One of Denver’s Foremost Authorities on Mortgage Fraud: Michael S. Richardson
I was watching the news today which reminded me of my book. I started reading my own book again and what is amazing thinking back is how many people did not care or did not want to hear what I was trying to say. You can bet most of those same people are the ones going to work on the loan modifications, now that is an oxymoron.
“They say when one door closes a window typically opens, giving you a chance to turn failure into opportunity or, as they also say, make lemons into lemonade. But they don’t say anything about the size of the window that needs to open when not just one but ALL the doors shut, or when all the doors shut, the walls fall down, and the roof caves in on the very same day!”
Michael S. Richardson
• According to the Mortgage Bankers of America, or MBA, their 2005 Mortgage Originations forecast estimates some $2,738,000,000,000 (that extra trio of zeroes isn’t a typo; that’s over 2 trillion dollars!) in new loans. This staggering number includes the approximately 20 million in home mortgages required to cover refinanced loans, new home sales and existing home sales. Those are big numbers, and now even the MBA is including the likelihood of fraud in their statistics, estimating that 10% to15% of mortgage loans have some kind of fraud involved. This means that between 2 to 3 million home loans originated this year could be fraudulent; that equates to over 7,500 new fraudulent loans every business day. Now that is an epidemic…
• The ripple effect of fraud is as deep as it is far-reaching. The mortgage lenders and borrowers stand to lose much more than the cost of the damages when fraud appears. At risk is their very reputation in the industry.
• Mortgage Fraud “Who? Who will bear the brunt of these costs? Same answer as before: You, me, and thousands of unwitting homeowners who would never in a million years think of committing real estate fraud. There’s no doubt that homeowners pay the price of mortgage fraud. The only way such costs can be avoided is to eliminate, or greatly reduce, the problem.” Mortgage Fraud
• The American Epidemic. Consider that title for a moment. Epidemic may sound like a strong word to you, but after considering the latest figures on real estate fraud it is my sincere belief that you will feel the word isn’t quite strong enough!
Well unfortunately 2009 is worse than ever imagined, we will pay the price for a long time to come, but if you think in 2005, we had 7,500 new fraudulent loans every business day, it all adds up, very unfortunately.
Those of you who take Mortgage & Real Estate profession seriously with strong morals & ethics, who are in this business to help sincere, hardworking, law-abiding citizens obtain housing with a mortgage that works for them need to stop those who prey on the innocent, the righteous, the unsophisticated and the trusting homeowners.
I am optimistic that it can only get better, but it is going to take time!
Michael S. Richardson
An American Epidemic
Mortgage Fraud – a Serious Business
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