Posted on Thursday, March 11, 2010
According to the Center for Responsible Lending, according to the FBI, Most Mortgage Fraud Comes from Lenders, Not Borrowers. Homeowners and home buyers are responsible for only a small share of mortgage-related fraud -- about 80% is perpetrated by brokers or other professionals. This point and many other interesting facts are included in HUD’s recent “Report to Congress on the Root Causes of the Financial Crisis.”
Im not so sure about this but always believe its important to consider all sides as long as we're clear about where the opinion is comign from.
Two other thoughts. We all know there are plenty of good guy mortgage brokers along with the bad but I do agree a big part of the problem was rogue mortgage brokers, often inexperienced too. And a ton of them jumped into the business during the bubble (a word to the wise, alot of them are soliciting you to do your mortgage modifications now). On the other hand, borrowers often juste "went along" with mortgage brokers they knew of should have known were committing fraud. And ignorance is no excuse. Heads up...there will always be people in positions like this trying to get you to do the wrong thing, especially when they're being paid a commission based on how much you borrow and how much interest you pay. It's up to you to vet them out and not go along. And on the bank side, they were eager to do as many lonas aas they brokers could originate. It was no secret within the banks that there were bad guy mortgage brokers. One of the first things Bank of America did when things blew up was stopped doing mortgages through brokers. I knew folks at World Savings who would laugh about getting loan applications directly from the borrower and then an application from the same borrower but through a broker and finding the income and other information on the broker submitted application was inflated (they would warn the broker that if it happened again they woudl revoke his authority to broker loans for them but I do not believe these things were reported in any other way).
There are more than two sides to every story.