Marla J. Shapiro
Real Estate and Mortgage Fraud
P.O. Box 6902
Vacaville, Ca. 95696
Since the beginning of the major fall in the mortgage lending industry in 2007, the amount of Real Estate and Mortgage Fraud discovery has continued to escalate to a record high. Property values have continued to plummet resulting in walk-aways, foreclosures and short sales. As a result, financial institutions have experienced significant losses.
This has triggered Federal, State and local examiners to take a closer look at the underwriting as well as quality control processes and procedure practices of Banks, Credit Unions and Mortgage lending institutions and investors. There has been significant discovery of Fraud across the board of this industry resulting in many cases of prosecution of all involved. All this being said…having worked in all areas of the lending institutions, these agencies were the ones that were supposed to be “minding the store”, so to speak. They were the ones writing the regulations that all these institutions were to abide by, but what went wrong?
Far too often it seemed that when these agencies would come to do their annual audits/examinations, they were more focused on the accounting side of things such as investments, liquidity, assets, deposits etc. Oh, they always ask for a dozen or so loans to review and always for the “officials and employee loans”. They however, never seemed to raise issues when exceptions were made nor did they ever seem to re-verify any of the information contained in the files. In my 30 plus years in the industry, I never once saw an examiner or auditor focus much effort on the Lending, Collections or Loan Servicing area of the institution to insure that proper procedures were in fact being followed according to “Guidelines” until the last few years. In most cases, the auditors/examiners that were reviewing the loan files were very recent college graduates with degrees in business, finance or accounting. They had checklists that they used to review the loan files, however, if they didn’t understand the terminology or even the documents that they were looking at, how could they possibly know if there was any fraud going on? It seemed that if the bottom line of the financial institution looked strong and the people in the lending areas were knowledgeable and could answer any questions, they were fine with it.
When the industry started to crumble…then it seemed that everyone was looking everywhere and anywhere to point a finger or assign the losses. Now the Federal Government is in charge. They are now looking to recover losses from anyone they can, including the little guys, buyers, sellers and borrowers.
It seems that nobody cared that the institutions that were buying these loans, which, by the way, were usually loans that were brokered to another broker, were responsible for Due Diligence, Quality Control and Compliance! The investors seemed to always turn their heads because the “Big Players”, you know the ones…were selling them bundles of loans which they could in turn sell into Mortgage Backed Securities and they too made a “bundle”.
Don’t wait to see what’s going to fall out of your next fraud case over time. Call me today! Let me take a look at your case and see how we can best assist you and your client to show where the responsibility truly lives.