Miami Herald: Ongoing Coverage of Mortgage Fraud
Pulitzer Prize winning stuff here:
State let crooked brokers keep working
http://www.miamiherald.com/multimedia/news/mortgage/brokers.html
Thousands with criminal records work unlicensed as loan originators
http://www.miamiherald.com/multimedia/news/mortgage/originators.html
State let crooked brokers keep working
http://www.miamiherald.com/multimedia/news/mortgage/probe.html
Exec had mortgage racket down to an art
JACK DOLAN, MATTHEW HAGGMAN AND ROB BARRY
The Miami Herald, 12.06.08
http://www.miamiherald.com/457/story/802703.html
See also:
Legacy of tainted home loans: vacancy, vandalism, foreclosure
ROB BARRY, JACK DOLAN AND MATTHEW HAGGMAN
The Miami Herald, 12.06.08
http://www.miamiherald.com/news/florida/story/802698.html
September 23, 2008
September 17, 2008
September 14, 2008
August 13, 2008
August 12, 2008
July 30, 2008
July 29, 2008
July 28, 2008
July 25, 2008
July 24, 2008
July 22, 2008
July 21, 2008
July 20, 2008
December 14th, 2008 at 5:18 pm
That’s quite a list. No disrespect to those bulls out there, but how can anyone really think we’re close to turning the corner at this point when most of the wrongs haven’t even been righted?
People are seriously underestimating the severity of the situation by relying on past recessions as a guide when none of us have ever seen anything quite like the period we’re living through right now.
December 14th, 2008 at 5:59 pm
Barry,
Once we log off, how do we get to the current thread without going through the previous posts?
December 14th, 2008 at 6:00 pm
and here I thought that it was always the borrowers fault. or that it was FANNIE or FREDDIE at fault. its never the brokers fault. they never do any thing wrong. none of them would ever commit fraud by faking any data to get a mortgage approved. and the states are always on the look out for consumers. it says so right there on their web site! and the SEC and the rest of the regulators were always vigilant in protecting consumers. and never ever looked at those they regulate as customers! no that would never happen.
December 14th, 2008 at 6:52 pm
Maybe it’s because I’m from Illinois, but I have to believe that someone was accepting bribes for the license approval. At any rate it is appalling that this happened, but wasn’t the “state money market fund” run by some ex stock broker before he resigned, after losing $50 million or so. Criminal or criminally stupid is the question, I guess.
December 14th, 2008 at 7:10 pm
More blame game. …I’m all for it and throw shoes at them too.
http://news.bbc.co.uk/2/hi/middle_east/7782422.stm
December 14th, 2008 at 8:00 pm
Right now on 60 Minutes..interviewing Whitney Tilson…sub-prime was first wave ($1 trillion market)…just starting are alt-A ( $1 trillion) and pay option ARM ($600 Billion) resets, which will lead to 70% default rates…there are massive defaults now, even at the teaser rates. So it looks like I’ll stick with my target for real estate to fall another 40% from current levels.
December 14th, 2008 at 8:19 pm
“No disrespect to those bulls out there, but how can anyone really think we’re close to turning the corner at this point when most of the wrongs haven’t even been righted?”
No disrespect to anyone, but, IMO, it’s not about the wrongs and the rights, it’s about greed and hope springing eternal: Japan is up 4.5%, Aussie up 3.6%, S Korea up 4.5% right now.
Even Roubini is sounding downright moderate these days, less definitive about the downside, even hedging his predictions about stocks a little now.
I think the markets and the economy are much more uncertain now than in any time in the past 18 months. There was no doubt we were heading lower in the second half of 2007 and first 9 months of 2008, but now? The easy money has been made on the short side; it gets tougher from now on, I expect.
I am still short, but worried.
December 14th, 2008 at 8:33 pm
I ran mortgage companies for 18 years. Most of the fraud is borrower fraud. Brokers are guilty with going along with it some of the time, but most of the time it is the borrower who lies about their income. First Pay Defaults (FPD’s in the mortgage world) are picking up and skyrocketing right now. Just in the past two months performance is dropping off the cliff.
~~~
BR: Um, check their tax returns maybe ? W2s?
And why have the FBI arrested over 1000 mortgage brokers ? (not counting the criminals with licenses in Florida.)
Banks have a fiduciary obligation to their investors and depositors at least try to stop blatant fraud. what took place the past 6 years was absurd.
December 14th, 2008 at 8:45 pm
“Most of the fraud is borrower fraud.”
Are you kidding me? I am in my 50s and for most of my life I could never have duped a banker into getting a 100% mortgage by lying about my income. They wanted proof! W2s, tax returns, and they wanted down payments!
Are you saying the brokers and bankers are more ignorant that the borrowers? That they were duped by low income people with little education and no business savvy?
They LET it happen. The borrowers merely learned how to play the game by lying, etc, but the bankers/brokers made the rules of the game; they LET it happen!
December 14th, 2008 at 9:34 pm
Thank you Barry & KJ Foehr. I was going to reply to that comment but decided to restrain myself and let others do it for me.
Just watched the 60 Minutes piece on the Alt-A and Option ARM mortgage mess about to hit us over the next few years. I can’t see how this ends well either way, regardless of short or mid-term stock market moves. Based on that piece alone, real estate is still WAY overvalued everywhere. This is going to get really ugly.
December 14th, 2008 at 11:21 pm
I mentioned here in July that mortgage fraud was up y-o-y in Q2. They are just pissing our money away.
December 14th, 2008 at 11:31 pm
See, I don’t think you guys have read the fine print of the CRA. You should check out the part which required banks to give loans to people who worked for companies that didn’t exist. And how the CRA required banks to hire criminals to make loans to minorities.
I’m tellin’ ya, that CRA is pernicious.
Oh, yeah, Barney Frank too!!
Steve Barry and Mannwich — naively, I had been thinking that the Alt-A and Option ARM stuff was all in the current bloodbath. I am not too chipper to hear how wrong I was about that……
December 15th, 2008 at 12:47 am
I wonder if the Miami Herald investigated while the bubble was being pumped, and not just 1-2 years afterwords?
December 15th, 2008 at 1:51 am
aka_ces,
remember something about our current “‘news’media” by allowing a bit of apochrypal anachronism..
a ‘reporter’ was walking past O’Leary’s Barn, and noticed the Lantern, close-by the Cow..
Did he move the Lantern, and summon the Fire Chief? ..Riight~ He called his ‘Photog’ for her to come down and grab some ‘Stock Footage’, you know, “for the can”..
On home, he went. Called out of bed, in the middle of the Night–Boy, did his g-friend think he Must have been Important–a whole precinct ablaze, his Editors words: “We’ve a Deadline to make!”, ringing in his ears..
By the time the Papers hit the Streets, half the City was asmoldering. The Journo? of course! a ‘Pulitzer’ for “Breaking News Reporting”, and another for “Explanatory Reporting”..the Photog even got greased w/ one for “Breaking News Photography”
The Editor, if he could string words together, in a sentence, had the inside-track on the ‘Editorial Writing’-model, but, sadly, not to be his. Happily, he was, merely, delighted with the incredible bump at the ‘News-stand’.
IOW, if you think there’s ‘News’ in the Daily PlayPer, you’re being Played, Daily.
December 15th, 2008 at 4:29 am
There’s clear documentation of previously soiled brokers still doing business and supported by the FHA in this article:
=============================
Businessweek
November 19, 2008
FHA-Backed Loans: The New Subprime
The same people whose reckless practices triggered the global financial crisis are onto a similar scheme that could cost taxpayers tons more
By Chad Terhune and Robert Berner
As if they haven’t done enough damage. Thousands of subprime mortgage lenders and brokers—many of them the very sorts of firms that helped create the current financial crisis—are going strong. Their new strategy: taking advantage of a long-standing federal program designed to encourage homeownership by insuring mortgages for buyers of modest means.
You read that correctly. Some of the same people who propelled us toward the housing market calamity are now seeking to profit by exploiting billions in federally insured mortgages. Washington, meanwhile, has vastly expanded the availability of such taxpayer-backed loans as part of the emergency campaign to rescue the country’s swooning economy.
For generations, these loans, backed by the Federal Housing Administration, have offered working-class families a legitimate means to purchase their own homes. But now there’s a severe danger that aggressive lenders and brokers schooled in the rash ways of the subprime industry will overwhelm the FHA with loans for people unlikely to make their payments. Exacerbating matters, FHA officials seem oblivious to what’s happening—or incapable of stopping it. They’re giving mortgage firms licenses to dole out 100%-insured loans despite lender records blotted by state sanctions, bankruptcy filings, civil lawsuits, and even criminal convictions.
More Bad Debt
As a result, the nation could soon suffer a fresh wave of defaults and foreclosures, with Washington obliged to respond with yet another gargantuan bailout. Inside Mortgage Finance, a research and newsletter firm in Bethesda, Md., estimates that over the next five years fresh loans backed by the FHA that go sour will cost taxpayers $100 billion or more. That’s on top of the $700 billion financial-system rescue Congress has already approved. Gary E. Lacefield, a former federal mortgage investigator who now runs Risk Mitigation Group, a consultancy in Arlington, Tex., predicts: “Within the next 12 to 18 months, there is going to be FHA-insurance Armageddon.”
…
Full article
December 15th, 2008 at 11:26 am
Oh, yeah, Barney Frank too!!
Frank, Dodd, Schumer, Gramm, Ted Stevens… They should all go feet-first into an industrial plastic shredder… But not before Mozilo!
December 15th, 2008 at 5:19 pm
A convicted felon can’t vote in a Presidential election in Florida but they’re a shoe in if they want to become a state licensed mortgage broker.
Um, ok….
December 17th, 2008 at 2:19 am
It’s starting to look like only the poor people are honest. They may have started out with some money, but after their home’s value dropped below their mortgage, their 401 collapsed and their pension (sic) got Madoffed, they aint got nothing. They used to say don’t trust anybody over 40. Now we can’t trust anybody with a positive net worth.