The CFPB did not Extinguish Loan Fraud

mortgage    andyenstallblog  creditCalling mortgage loan fraud virtually a cottage industry during the housing feeding frenzy that lead to the Great Recession, that practice did not end with the sudden creation of the Consumer Financial Protection Bureau (CFPB), Pat Dalrymple tells MHProNews.

Big money on the table can draw a conspiracy of mortgage broker, appraiser, title company and realtor. Lending fraud is sometimes considered a victimless crime because only the lender can be hurt.

In the mortgage lending business nearly 50 years in Western Colorado, Dalrymple says everyone knows of instances of fraud—false documentation, inflated values, he opines to postindependent. The most prevalent scheme is occupancy fraud, which is rarely detected unless the loan goes into default. Under the double contracting ploy, a short-on-cash borrower will sign a contract for a $200,000 loan with the lender when the sales price is actually $180,000, realizing a ten percent down payment on the spot.

The whole country suffered as homes turned into foreclosures and jobs disappeared.  Big, little and mega-big companies got caught up in the whirlwind, including mortgage giant Fannie Mae, which bought $500,000,000 in loans that did not exist from Tayor, Bean and Whitaker. It then forgot to tell brother Freddie Mac of the swindle, and Freddie proceeded to buy a package of bad debt. Fannie also neglected to notify its government regulator. ##

(Image credit: andyenstallblog)

matthew-silver-daily-business-news-mhpronews-com (Submitted by Matthew J. Silver to the Daily Business News-MHProNews)

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