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Florida is leading the nation in foreclosures and mortgage fraud. The good old Florida mortgage loan is originated by more mortgage brokers than any other state. Year after year Florida leads the nation in mortgage related problems why?
This past year the head of Florida Financial services was pushed out of office because over 10000 mortgage broker licenses were issued to ex convicts. It absolutely amazes me how the blame always gets pinned on the mortgage broker. Convicts or no convicts,
it has nothing to do with the mortgage broker, but when blame needs to be spread , the mortgage brokers are the ones that have the target on there back. More legislation keeps being turned out against mortgage brokers and mainly, through disclosures that border the ridiculous.
It's not the Florida mortgage brokers fault, the broker is no different than any loan officer, working internally for any bank or any other lender.
It's the fault of the bank or lender, after all they are the one that "supposedly verifies" everything before they fund any loans. Whether you’re a Florida loan officer of Florida mortgage broker originating Florida mortgage Loans, the process is the same in underwriting. The underwriting department has to verify and sign off on all documents before they fund. Most lenders and banks have what they call QC departments (Quality Control)
where they verify and re-verify documents that were signed off by the underwriting department.
But when anything goes wrong the Florida mortgage broker is the one that gets the blame.
Yes, there are many unethical mortgage brokers originating Florida mortgage loans, but there are just as many loan officers at other lending institutions. Ninety nine percent of the time, there is usually a ring of a few people involved in an act of fraud, above and beyond the scope of the mortgage broker. Usually there is an appraiser, a title company/attorney, a loan originator and an underwriter working together.
With all the technology that is out there to verify everything from employment to appraisals, fraud should almost be completely
Eliminated, yet it is everywhere. If every mortgage company had an off premise quality control department that rechecked and re-verified all Florida mortgage loans, it would be harder to get anyone involved in any fraudulent action, thereby wiping out almost all fraud that is Originated. When your entire office departments are under one roof, it's just too simple for anyone to get involved in a fraudulent scheme, create an off premise QC dept and watch the fraud decline.
One of the biggest problems in Florida was when the sub prime industry was thriving. The most popular loan on the sub prime side was the fixed rate 2/28 (fixed rate for two years then turns to adjustable rate there after) at 80 percent LTV, mix that with a twenty percent second mortgage which was usually fixed or an interest only heloc for a combined 100 percent financing, This was a recipe for disaster. What happened was at the two year mark the housing bubble burst driving down values. At the same time the 2/28 turned to an
adjustable rate shooting up the home owners monthly payment, The problem created was that the original mortgage was 100 percent financed at the beginning, now with home values dropping, and the mortgage payment going up after the adjustable rate kicked in, it’s impossible to refinance, creating a foreclosure epidemic. It’s not the broker or the originator to blame; it’s the banks and lenders that created ridiculous combination loans around adjustable rates.
Article Source: http://www.articlemotron.com
Florida has the largest mortgage fraud and some how the mortgage broker always gets the blame
Jim Anderson has been an investigative writer and reporter for many years.he has been a branch manager for multiple national lenders and an active real estate agent over the last 25 years and brings a wealth of expierence and knowledge.
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