Posts filed under “Legal”
Orson Benn, once a vice president at the nation’s largest subprime lender, spent three years during the height of the housing boom tutoring Florida mortgage brokers in the art of fraud.
From his office in New York, he taught them how to doctor credit reports, coached them to inflate income on loan applications, and helped them invent phantom jobs for borrowers.
While prosecutors looked at roughly $100 million in loans written by Benn and a cadre of co-workers, that represents just a portion of the loans they approved during his aggressive expansion into Florida.
The Miami Herald found that Benn’s network approved more than $550 million in home loans from Tampa to West Palm Beach to Miami, according to an analysis of court records. In Miami-Dade County alone, Benn’s office approved more than $349 million in loans on 1,913 homes — more than one in three have since fallen into foreclosure, the analysis shows.
Valdes brokered at least 100 of those loans worth $22 million — nearly all based on false and misleading financial information, the newspaper found
How did they doctor loan apps? Simple mortgage broker fraud: “non-existent employers, grossly inflated salaries and sudden, drastic increases in the borrower’s net worth.”
There apparently was an art to falsifying the documentation, and Benn taught his brokers precisely how, falsifying income and employment data:
He taught one of those brokers, Scott Almeida, a convicted cocaine trafficker, to prepare phony income statements and doctor credit reports. A few months later, Almeida introduced Benn to Tampa brokers David Tuggle and Eric Steinhauser. After Benn taught them to prepare phony documents, they began to write millions of dollars in loans.
The accompanying video is a must see, and the entire article definitely worth reading.
Nothing on predatory borrowers, though . . .
Laughable: “Tyler Cowen: Predatory Borrowing The Bigger Problem” (January 2008)
Exec had mortgage racket down to an art
JACK DOLAN, MATTHEW HAGGMAN AND ROB BARRY
The Miami Herald, 12.06.08
Legacy of tainted home loans: vacancy, vandalism, foreclosure
ROB BARRY, JACK DOLAN AND MATTHEW HAGGMAN
The Miami Herald, 12.06.08
These Minimum Advertised Prices — floors under which retailers cannot drop a product price — always struck me as anti-competitive, and well, just wrong. The Supreme Court has been all over the map with them. Why not simply let retailers and manufacturers compete in the marketplace? “A group of major discounters, including eBay Inc. and…Read More
Chrysler has hired bankruptcy firm Jones-Day, sources say. WSJ: Chrysler several weeks ago hired the prominent law firm of Jones Day as bankruptcy counsel, suggesting the auto maker is preparing for imminent financial failure should its efforts to obtain federal rescue funds fall short. Gee, I wonder if that will put any pressure on Congress…Read More
Here is a question that I have been wrestling with: What exactly did the repeal of the Glass-Steagall Act accomplish? Were there positives as well as negatives? Should the Gramm-Leach-Bliley Act be repealed, and Glass-Steagall reinstated? > ~~~ What say ye? >
“In hindsight, it was spot on.” -Jeffrey Brown, former top official at the Office of Comptroller of the Currency, one of the first agencies to raise concerns about risky lending. > A brutally damning article about the warnings the Bush administration received and ignored was published this morning by the Associated Press. The AP summed…Read More
WSJ: SEC charges Dallas Mavericks owner and Internet entrepreneur Mark Cuban with insider trading related to sales of Mamma.com, now known as Copernic. The Securities and Exchange Commission filed insider trading charges against Mark Cuban, the outspoken owner of the Dallas Mavericks, for allegedly dumping shares in Mamma.com upon learning it was raising money in…Read More
“Some people look at subprime lending and see evil. I look at subprime lending and I see the American dream in action. My mother lived it as a result of a finance company making a mortgage loan that a bank would not make.” -former United States senator Phil Gramm > There was a fascinating front…Read More