Mortgage Fraud – No Surprise!

According to “South Florida Business Journal” reporter Jim Freer (reporting March 23rd from a money laundering conference in Hollywood, Florida):

Kathy Hayhurst a Coconut Grove lender (who states her company does not do subprime loans) involved with reducing Mortgage fraud, fears we “might be the early stages of a fallout that could hit many lenders.”

“Since early March, three companies that buy mortgages have returned loans to Hayhurst Mortgage - all about six months after Hayhurst made and sold the loans. Those investors, including Bear Stearns, have increasing concerns about mortgage fraud and are doing more checking on the background of borrowers in their portfolios. Their reviews are uncovering problems including faulty appraisals and previous sales that were hidden from lenders.”

Duh! It is about time someone started checking. I have been uncovering this sort of thing with little effort from Miami public records. My question is: What took the investors so long to CHECK on what they were investing in? And, why didn’t Hayhurst do more checking on her loans so they wouldn't have come back to bite her? Reporter, Freer, says further:

"Hayhurst Mortgage and lenders in general have systems for checking the validity of appraisals, borrowers' credit and details about properties, but money launderers and other scam artists are finding more ways to use fraud to obtain mortgages, Hayhurst said.

When a loan is returned to a lender, cancelling the sale of a house or condo, the lender owns the home until it finds another buyer.

"It costs us a lot of money to pay interest on the lines of credit from our warehouse bank [that funds the loan]," Hayhurst said.

I wish I knew a money laundering conference was held so close by. It would have been fun to crash it. BTW Someone with stock in Deutsche Bank should call them. They have bought a lot of rotten loans.