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Mortgage meltdown linked to fraud
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to TYR | 7:28 a.m. Dec. 14, 2007
LETS TALK ABOUT REAL ISSUES. WHO HAS THE MOST TO BENEFIT? THE TITLE COMPANY?
NO, THEIR FEES ARE SET AND DRAMATICALLY LOWER THAN THE R.E. OR MORTGAGE
INDUSTRY. THE REAL ESTATE INDUSTRY HAS A CODE OF ETHICS AND THEIR FEES ARE
DISCLOSED TO THE CLIENTS. LOOK AT A SETTLEMENT STATEMENT AND YOU WILL FIND OUT
WHO THE REAL WINNER IS, THE MORTGAGE LENDER. AND THAT DOESNT EVEN INCLUDE THE
YSP(YIELD SPREAD PREMIUM) USUALLY 2-3% OF THE LOAN, PAID TO THE MORTGAGE BROKER
BY THE LENDER FOR THE OPPORTUNITY OF BROKERING A LOAN ABOVE THE GOING(PAR) RATE.
THE MORTGAGE BROKER OR LOAN OFFICER IS THE ONE RESPONSIBLE FOR HONESTY AND
ETHICS IN THE LOAN APPLICATION AND ASSOCIATED DOCUMENTS, BUT WITH THE PAYDAY SO
DRAMATIC, WHO'S TO STOP HIM FROM STRETCHING THE TRUTH IN ORDER TO MAKE A
SALE. LETS PUT BLAME ON THE RIGHT INDUSTRY, THE MORTGAGE INDUSTRY.
JW | 7:32 a.m. Dec. 14, 2007
This is a sad commentary on American society, that fraud should be so bad that
it destroys the economy. Or maybe it's justice somehow.
Comments continue below
Pat LoGiudice | 8:00 a.m. Dec. 14, 2007
The almost exclusive cause of the real estate "mess"
is GREED! Some effort has to be made to point out that greed came from EVERY direction in the real estate sector of America recently. Buyers included. People cannot be "talked into" inappropriate loans, etc unless they are participating in mindless GREED!
We see greed in children naturally and much of America is made up of young and OLD children!
is GREED! Some effort has to be made to point out that greed came from EVERY direction in the real estate sector of America recently. Buyers included. People cannot be "talked into" inappropriate loans, etc unless they are participating in mindless GREED!
We see greed in children naturally and much of America is made up of young and OLD children!
LaserTrac | 8:18 a.m. Dec. 14, 2007
To all the flippers (composed of individuals, agents, and partnerships) who
bought properties, made miminal comestic improvements, then jacked up the prices
by 25-50k; you are reaping what you sowed. It will justice to watch your ill
gotten windfalls and properties to slip from your greedy fingers. You played a
game of risk and now that the market is experiencing a correction, all of your
incessant whining is falling on deaf ears. You'll get no sympathy from me.
Anonymous | 8:47 a.m. Dec. 14, 2007
It wasn't the flippers that made the money. It was the brokers and people
who packaged the loans to sell to investors. They give loans to poor credit
risks and they inflated the home prices using phony appraisals.
Having three repos in your block depresses all property values.
This is a blessing. Sick of cold. Want to work were salaries are higher? Tried of being surrounded by victims? Will lower property values this may be your chance to leave Utah.
Having three repos in your block depresses all property values.
This is a blessing. Sick of cold. Want to work were salaries are higher? Tried of being surrounded by victims? Will lower property values this may be your chance to leave Utah.
Amen | 8:48 a.m. Dec. 14, 2007
Amen Lasertrac. Amen.
Connecticut Resident | 9:27 a.m. Dec. 14, 2007
The mortgage frauds are everywhere not only in Utah. I agrred that most of it is
tied to greed, but if you really want to see raging greed, yoou should be in the
NY area where Wall Street and corporate execs take it to a new level. The only
area where in may be worse is in the DC area with all the government types and
lobbyist throwing their money around to the vultures. Sad state of affairs and
we are all affected one way or another.
Stephen | 9:45 a.m. Dec. 14, 2007
None of it could have happened without appraisers. Over-valuation of properties
to qualify borrowers for toxic loans was the linchpin. Google: "The Truth
About Real Estate Appraisal"
iThink | 10:02 a.m. Dec. 14, 2007
It is ironic that the very people creating the problems are the very people
coming back after the collapse to tell you why it happened and what to do about
it. First, real estate agents, contractors/developers and lenders work hand in
glove to inflate the value of the property. Contrary to the conventional wisdom
appraising property is not a science and 2 appraisers can legitimately come up
with 2 different values. How are house flippers guilty of anything that the
aforementioned creators of the problem provide the legal opportunity for.
That's kind of like saying that the people who take free gifts that a
business gives out are bad because the business goes broke after the fact.
Real estate agents steal equity through outrageous fees which always get priced into the home, contractors/developers steal from consumers by inflating the price of a home according to their material wants at any given moment, and the lender steals their portion upfront along with future earnings of the consumer. The bottom line is they get rich, while the consumer gets the blame and pays the price forever.
Real estate agents steal equity through outrageous fees which always get priced into the home, contractors/developers steal from consumers by inflating the price of a home according to their material wants at any given moment, and the lender steals their portion upfront along with future earnings of the consumer. The bottom line is they get rich, while the consumer gets the blame and pays the price forever.
Appraisers? | 10:29 a.m. Dec. 14, 2007
Re: Stephen
Certainly there are corrupt appraisers in cahoots with mortgage brokers. But I think pinning this on appraisers is simplistic. I'd point my finger at the lenders, and even more so, the secondary mortgage market, which, for some reason, thought sub-prime loans were a good investment, instead of a bad one (which they are). If the secondary market hadn't been snapping up these loans, lenders wouldn't have been offering them.
The job of an appraiser is to look at market data and conclude to an opinion of value. If similar houses in similar neighborhoods are selling for $200,000 then the appraiser must conclude to a similar value. There ain't no two ways about it.
Even if an appraiser thinks the homes are selling for too much, s/he has to provide the MARKET EVIDENCE to prove it. And that's difficult to do when the market evidence says otherwise.
Certainly there are corrupt appraisers in cahoots with mortgage brokers. But I think pinning this on appraisers is simplistic. I'd point my finger at the lenders, and even more so, the secondary mortgage market, which, for some reason, thought sub-prime loans were a good investment, instead of a bad one (which they are). If the secondary market hadn't been snapping up these loans, lenders wouldn't have been offering them.
The job of an appraiser is to look at market data and conclude to an opinion of value. If similar houses in similar neighborhoods are selling for $200,000 then the appraiser must conclude to a similar value. There ain't no two ways about it.
Even if an appraiser thinks the homes are selling for too much, s/he has to provide the MARKET EVIDENCE to prove it. And that's difficult to do when the market evidence says otherwise.
Fraud by Mortgage Brokers | 11:07 a.m. Dec. 14, 2007
I know several mortgage brokers (in Orem) who would refinance their own
mortgages on a quarterly basis (through friends in the same office) so that they
would never have to make a house payment. This scheme involved
misrepresentation on 'stated income' loans and other fraud. They
would perpetuate this type of fraud against the companies that they supposedly
represent - just for the sake of saving a little cash flow every month.
When people are willing to sell-out their integrity for such a small amount of money, just imagine what they would do if a larger prize is at stake. I think we're just beginning to see the full extent of the fraud in the entire industry.
When people are willing to sell-out their integrity for such a small amount of money, just imagine what they would do if a larger prize is at stake. I think we're just beginning to see the full extent of the fraud in the entire industry.
Mortgage Fraud | 11:13 a.m. Dec. 14, 2007
With all the mortgage fraud and mortgage mess in Utah, why are the home values
still increasing so much in 2007? I saw a few recent reports showing SLC as the
#1 real estate market in the nation with 15-23% appreciation in 2007 alone. That
is astounding to me. I would assume that IF home values really are increasing in
SLC, and assuming that homes are not reallly selling that quickly in the same
area, that this should make for a very poor real estate market that could drag
on for years.
Used the right way | 11:19 a.m. Dec. 14, 2007
when we bought our home 5 years ago, we had a second loan on it. Long story
short we used it to pay down our mortgage. Five years later we owe $60,000 on a
$200,000+ home.
Realtors push the appraisers as well. They're all in bed together, appraisers, realtors, title companies.
Where I live 7,000+ homes are on the market, it's flooded.
STOP TRYING TO MOVE EVERYONE! TAKE YOUR HOUSES OFF THE MARKET. IT'S SUPPLY AND DEMAND.
Realtors push the appraisers as well. They're all in bed together, appraisers, realtors, title companies.
Where I live 7,000+ homes are on the market, it's flooded.
STOP TRYING TO MOVE EVERYONE! TAKE YOUR HOUSES OFF THE MARKET. IT'S SUPPLY AND DEMAND.
sandy man | 11:31 a.m. Dec. 14, 2007
The fact is simple, you can�t blame any one person, but can
blame a lot of people. To simple assert that it is the builders, real estate
people, etc is disingenuous, builders made money, real estate agents,
Lenders/Brokers, Title company�s, Appraisers, Cities, and
The State (by fees) all made money, which transfers to lower taxes more services
etc. we are all to blame. It is always easier to blame than take some
responsibility
DC | 4:43 p.m. Dec. 14, 2007
I find it interesting what has happened to this real estate market. I have
witnessed it first hand myself. I'm glad that it has finally come to this
point and those dishonest people who contributed to this disaster are finally
left reaping what they've sown. There has been dishonesty, fraud, and
disceit in EVERY area of this mortgage meltdown. Unfortunatley, the norm in this
industry has been to take full advantage of the segment (appriasal, lender,
title, etc) that one has interest in. People have shattered their integrity to
make a buck and take advantage of another. You can't point to one specific
segment of the mortgage meltdown, all segments are to blame and it's the
individuals behind each who are the culprits. Those people have given the honest
a bad name. Shame on you.
Karl | 5:44 p.m. Dec. 14, 2007
DC is right on the money! Fraud is not just because there are greedy mortgage
loan officers. The greed is fueled by the borrower/buyers. They go to these
seminars that preach easy money, quick cash if you attend their seminars. Then
they're pushing their mortgage lender to close a non-owner home as an owner
occupied home. I've been asked to do this several times, and I then smile
and ask them if they'd ask their own family members to commit fraud in
their name. This usually ends this conversation and they either move on to
another loan officer or they actually respect you and work it out the right
way.
It makes me laugh when I read the general public or press point their fingers at the mortgage lenders like they're some type of plague. Last time I checked the public was the one benefiting from these closings as well. The media as well benefits, just ask Dave Fox.
It makes me laugh when I read the general public or press point their fingers at the mortgage lenders like they're some type of plague. Last time I checked the public was the one benefiting from these closings as well. The media as well benefits, just ask Dave Fox.
Anonymous | 1:51 a.m. Dec. 16, 2007
To the poster who said "THE REAL ESTATE INDUSTRY HAS A CODE OF
ETHICS..." - give me a break. Their supposed code of ethics has no
enforcement mechanism. The realtors (used home salesmen would be a more
appropriate description) pumped up this housing market on many levels. Their
national association ran adds to convince reluctant families to buy at the top
of the market. Individual used home dealers used lines such as 'real estate
only goes up', 'buy now or be priced out forever' and 'stop
throwing away money on rent' to convince families to buy overpriced homes.
The used home salesmen could also recommend a friendly appraiser and mortgage
broker that could make the deal work, no matter how over-priced the house was
(remember - Suzanne researched this!). They are just as guilty in this Ponzi
scheme as the mortgage brokers, appraisers and greedy house flippers.
TOT | 6:04 p.m. Dec. 16, 2007
"why are the home values still increasing so much in 2007? "
The realtors pick the statistical measure that sounds the best. The Utah market hit a brick wall about six months ago. You know where a cartoon character runs off a cliff and it takes them a bit to realize there is nothing between them and the ground below? That's where the Utah market is now. It will be a silent spring for the housing market. The bigger story will be major dislocations in the economy coming soon. The real estate collapse is just the trigger. Worse things to come than a slow housing market. Massive job lay-offs will be announced this spring and that will send the economy into a steeper nose dive.
The realtors pick the statistical measure that sounds the best. The Utah market hit a brick wall about six months ago. You know where a cartoon character runs off a cliff and it takes them a bit to realize there is nothing between them and the ground below? That's where the Utah market is now. It will be a silent spring for the housing market. The bigger story will be major dislocations in the economy coming soon. The real estate collapse is just the trigger. Worse things to come than a slow housing market. Massive job lay-offs will be announced this spring and that will send the economy into a steeper nose dive.
Bob Galbraith | 10:23 p.m. Dec. 16, 2007
Over the years I have learned that anyone relying on sales, whether cars, houses
or ? will need to paint the necessary picture in order to keep food on THEIR
table.The most reliable source of real estate market info I have found over the
years has come from a person who conducts foreclosure sales and is in the thick
of ACTUAL conditions in the market.Who needs to keep values climbing in order to
increase commissions? Duh!
TOT | 12:11 a.m. Dec. 17, 2007
Utah right now reminds me of the guy whose wife is making him sell his
unfinished car project in the local newspaper. Tons of almost finished houses
are for sale. These guys must be UP TO THEIR NECKS, but still think they are
going to sell a particle board shack for 4-900,000. Crazy!!
I LOVE TOT | 9:36 a.m. Dec. 17, 2007
Right on, TOT.
Reality | 11:49 a.m. Dec. 21, 2007
It is not as bad as you might think. The market is stabelizing, and will
imporve. The problem was caused by crooks of all kinds. The best thing about
the market correction is that it exposes those crooks and runs them out of
business.
TOT | 11:49 a.m. Dec. 24, 2007
No Reality, it's much worse than you have imagined. Put on your seatbelt.
Litemup | 11:10 a.m. Dec. 26, 2007
The problem hasn't been so much with fraud, It's a lot to do with the
people who are buying homes they can't afford. Everyone wants the dream
home but at the the same time they don't want to give up the boat, the
truck the Harley or any other toy that's driving them into the ground
financialy. Don't blame investors, blame foolish spending habits because no
one can stop ANYONE from being an idiot.
TOT | 2:27 a.m. Dec. 29, 2007
Litemup,
Most of these "investors" in real estate over the last several years would be more accurately called speculators. Many people bought homes they could not afford because everyone just "knew" that house prices could only go up. Well, the big pretty bubble is now sinking to earth and it will take many fortunes and much of the economy down with it, no matter what Jeff Thredgold says.
Most of these "investors" in real estate over the last several years would be more accurately called speculators. Many people bought homes they could not afford because everyone just "knew" that house prices could only go up. Well, the big pretty bubble is now sinking to earth and it will take many fortunes and much of the economy down with it, no matter what Jeff Thredgold says.
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Blake Heiner, vice president of First American Title Insurance Co., talks to CREW members in Sandy Thursday. He said Utah is a prime market for mortgage fraud and that lenders "have to pay more attention to the transactions that they're making."
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