The Battle Against Loan Fraud
(As we gradually adjust to the slowing and changing housing market, many new policies, rules and regulations are being implemented; some a benefit and others a detriment. )
One very beneficial thing that is happening lately is the formation of special groups whose goal is to rid the mortgage industry of corrupt brokers, dishonest practices and overall instances of mortgage fraud
This is very good news for both the real estate and mortgage industries, as well as the overall health of our economy for a variety of reasons. First of all, there has been an overwhelming increase in the amount of mortgage fraud cases reported, and the amount of lenders and brokers who are only in the industry for themselves.
There are a variety of organizations and groups that have started to rid the mortgage industry from instances such as the ones mentioned above.
A September 27, 2006 article from Realty Times, “Groups fight loan fraud,” discusses how industry insiders are looking to eliminate mortgage fraud from the business.
One of the major groups that are fighting the battle against dishonest and cheating mortgage officials is called Lenders Who Care.
“A small group started two years ago to protect borrowers from unethical lending practices now includes 40 members in 16 states. At the same time, lenders are building a database to help identify unscrupulous loan officers before the bad guys can rip off their employers.”
“Members of first group, the nonprofit Lenders Who Care, adhere to strict guidelines, offer home-buyer education and provide services based on honesty and ethics. Applicants for membership must have two years of experience in the mortgage business and go through a screening process, including a criminal background check.”
Once members are accepted into this prestigious group, they will have to adhere to strict guidelines and lending standards. The lenders must offer both governmental and conventional loans to their customers, so they are full-service.
They are required to put the customer first, which is something that is sometimes unusual in an industry driven by commissions.
One unique thing about Lenders Who Care is that they do not take company wide memberships.
“‘In every company, there are some loan officers who can be trusted and many who are only looking out for themselves,’ the organization's public relations representative said. ‘Most loan officers are too focused on their own greed to care about the consumer. We identify the honest, fair and reputable individual professionals who are focused on educating the client and putting the client first.’”
The organization would like to have 500 members by the end of this year.
Although there are many lenders and loan officers who are completely ethical and looking out for the best interest of their clients, there are those who give fair people in the industry a bad name, resulting in the creation of groups such as Lenders Who Care.
In addition to this, there is also a database in the works that lists loan officers who have been suspected of mortgage fraud.
“Meanwhile, another new cop on the beat in the war against mortgage fraud, the Coalition Against Broker Fraud, has created a ‘comprehensive database’ on brokers and other financing business insiders known or suspected to have been involved in fraudulent activity.”
Both of these things should work together to combat the ongoing battle against mortgage fraud.
