Maryland and mortgage fraud
The Mortgage Bankers Association and the Mortgage Asset Research Institute, which released the study today, say that Maryland's reported mortgage fraud as a share of loans originated last year is 15th worst in the country. That's the same ranking the state had in 2006.
By "fraud," the groups mean both the fudging that homebuyers did to qualify for a loan ("I make $150,000 a year -- yeah, that's the ticket") and the scams by people looking to steal from lenders and scram. Some of the latter are really complex, with straw buyers and falsified appraisals and the like. Click HERE for an FBI briefing on the subject.
The worst 10 states for mortgage fraud, according to the new report:
1. Florida
2. Nevada
3. Michigan
4. California
5. Utah
6. Georgia
7. Virginia
8. Illinois
9. New York
10. Minnesota
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Comments
I find it hard to believe the maryland was 15th on the list, given the scam problems with Metro Dream Homes and the Metro Money Store. I wonder if they have included those in their findings or if they didn't because the FBI is chasing these companies down some very deep rabbit holes.
Posted by: Jonathan Benya | March 15, 2008 1:26 PM
Perhaps the issue is that it's reported mortgage fraud, as in reported by the lending institutions -- companies can choose not to report.
The other thing to consider is that foreclosure rescue scams like the Metropolitan Money Store situation aren't a problem only in Maryland.
Posted by: Jamie Smith Hopkins | March 15, 2008 1:46 PM
you're absolutely right, I've been following quite a few scams throughout the country, and it just seems like metro money store (400 estimated) is rather large in scale. the MDH situation (2,000 homes) is absolutely mammoth, and there have been as many as 50+ homes in a single subdivision involved with that mess!
Posted by: Jonathan Benya | March 15, 2008 11:43 PM
That's amazing -- and really depressing.
Posted by: Jamie Smith Hopkins | March 16, 2008 6:31 AM
Jamie,
I really think one has to distinguish between fraud/deception perpetrated by the borower vs. fraud by those in the industry. When a mortgage broker, either without the borrowers knowledge or by convincing a borrower it is "OK", pads the income on a loan application, or obtains a phony appraisal, this is not homebuyer "fudging", nor may it be the lender being defrauded. In many foreclosures today, the borrower knew nothing of the fraud, may have been deceived as to the terms of the loan, or promised an opportunity to refinance out of the bad loan. In these cases, the lenders may not be victims--afterall,they made the loans. It is myth that most homebuyers knew what they were doing and made bad decisions. If one wants to talk about making bad decisions, one needs to confront the investors.
I am deeply troubled by the tendency to "bail-out" Bear Stearns, but leave deceived homebuyers twisting in the wind.We've heard a lot about "HOPE Now" & HELP Now", but the emphasis needs to be on the "NOW" for homeowners.
Posted by: Robert J. Strupp | March 16, 2008 3:29 PM
Good point, Robert. I'd really like to know how much of the so-called fudging -- as opposed to the scam artist stuff -- was done by the brokers or lenders. It's bad enough when the borrowers knew, convinced by the industry professionals that this is the way things work, but when they had no idea ...
Posted by: Jamie Smith Hopkins | March 16, 2008 5:29 PM