The problems in the mortgage industry has caused the last year to be a rough ride for many in the country and looks to be possibly an even rougher ride for many more next year.
Those who played by the rules will be paying for the unethical and unprofessional behavior of others. We have all read stories about loan officers, real estate agents and appraisers who have conspired to inflate prices and pull out cash or take kick-backs on real estate transactions in various parts of the country. Those who did that should be made examples of. Loss of license and the right to ever practice in the profession along with serious prison time is definitely in order. The profits gained by their illegal activity needs to be seized by the government, just like they would do for a drug dealer or anyone else who has ill gotten gains.
It makes my blood boil every time I read a story about how greedy, dishonest people inflate prices of homes to line their pockets with cash. They stick it to everyone around them. By inflating the sales prices of properties they have injured many folks for large sums of money. They have artificially inflated values of properties in the area; causing buyers to pay more than they should for their homes. The lenders they cheated will now be taking huge losses as a result. Investors and future buyers will all be paying more and having to meet even higher standards to get their loans, thanks those responsible for past transgressions. Those victims who have since purchased at inflated prices, lost valuable equity thanks to their fraud.
On a human side they have injured the reputation of their professions. Those of us who conduct ourselves in an ethical, professional manner will be paying for what the small minority of dishonest and less than professional have done. Their actions have caused a loss of the public's trust and now leave the ethical professionals to clean up the mess they left.
In my practice I do not see the problems anywhere near the extent we read about in other parts of the country. It still impacts us all; because the mortgage money is affected everywhere as a result of what happens in one part of the country. New laws and restrictions will negative impacts on future borrowers. First time buyers will face many new obstacles.
I wrote a blog post yesterday that asked the question why these problems seem to be more prevalent in other parts of the country: Why Does Hawaii Have Fewer Foreclosures?
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Randy L. Prothero, REALTOR®, ABR, AHWD, CRS, e-PRO, GRI, SFR
Century 21 Liberty Homes
Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers. His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.
Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) and the Leeward Regional Chairman of the Honolulu Board of Realtors. To improve overall professionalism in his area Randy also offers classes for real estate agents.
www.HawaiiRandy.com * Oahu (Honolulu County) Property Search * Hawaii Military Relocations
Randy,
Do I detect that someone has a thorn in their butt?:) I agree...the general assumption is that this mess was caused by all parties..the consumer,the Realtor...the LO or mortgage broker...all at fault because all let it go through and close. Well now after all this came out...those who own are struggling to keep what they have....one of my present clients bought a home before they met me and were a perfect example of the subprime mess. They now are using me to sell short...I asked them if they ever tried to contact the LO who originally helped them with the loan...I was told they did and he never showed up at the home to help them later on....just disappeared from the business...another slime ball in my opinion. I also heard the agent has also left the business as well.
George - I hope as they thing shake out those who benefited by stealing, they are made to pay back society.
Lane - I received an offer on a property not long ago that we rejected and told the other side what they were trying to do was illegal. The real estate agent was new and didn't know better. The loan officer was from out of state and didn't seem to care.
Jennifer - Now that the we are all paying, I hope the powers to be start shutting them down.
Hi Randy - I agree that it is a shame that the innocent seem to have to pay the price for the gullty in this equation, so it goes in life. When we pay a higher price at the supermarket because of shoplifters, we are doing the same thing. Truth is, we need to correct the problem. It won't correct itself. And, those of us who are still here are the easy ones to find. The ones who caused a lot of the current problem have already scurried off to find another get-rich-quick "deal".
Marlene - It seems to penalties and enforcement are not near enough to be a deterant. I agree many have skipped on to their next get rich quick deal.
Steven - There seems to be a lot less shenanigans on your side of industry. Although in Hawaii anyone with a business card can call themselves a home inspector. The public does need to be careful there too.
Randy.... in all honesty, I have given up with the topic of fraud, because people will do it in any market. As mentioned, it's called greed. Matt Bloom and I were just talking about this. Apparently lenders are getting clients to borrow money for stated loans at a high rate of interest, having them bring that for their down payment... BUT... mean while, they are raising the purchase price to cover this money that they are borrowing, which you can't do when buying a home. There is even a section on the 1003 (application) that asks this question. New fraud back in the market and from what Matt stated, it's all over Florida.... ouch, like that market area really needs anything else....
It was brought to my attention by someone on AR that a member had a site that link you to another site to buy fake pay stubs and W-2's.... LOL Well, they are kicked off,,,.... but come on...
Well you can not blame all the LO's
Some of them are Honest here !
The regulations where not there during the Housing Boom , Neg Am Loans , Greety Realtors , Greety Clients , Greet Sellers . Fannie and Freddy took it all to easy . I remember when the Neg Am Loan was pushed and Realtors ran into my door and ask me to get this loan for them self and their clients .
I remmeber when a realtor came in my door and told his client that he is qualified with a 645 Score on a income of $15.00 and $ 1,400.00 in savings to buy a 8 Bedroom house Owner occupied for $1,100,000.00. on a Neg am Loan ! I suggested this client to may get in line for a 2 Bed, Condo for $245,000,00 affordable housing project .
Not mentioned that Mortgage Bankers are in the same Boat . They have done wrong as well but been very well covert by the Banking Rules and Regualtions .
Ya Ya it is all the LO's Fault for the default of the clients because the Realtor told the client that his house will be much more worth .
I have heard of Mortgage Consultants and Bankers that have been specilized charging clients up to 8 Points !
I think those are the guys you are talking about ,
My Highest mortgage Origination fee was 1.5% on par Rates (the rate that does not cost anything to the client or the lender )with traditional Fees .
This is what i do today and did in the past , No Ifs and but's ,that's why i did not so well during the Housing Boom .
Georg
Georg - In my post I listed not only loan officers, but real estate agent, and appraisers. It also takes an escrow officer participating to make many of these dirty deals work.
They are the exception to the rule, but have hurt many people.
Randy - it's a rampant problem,. I just posted about the SEC finally taking action against a group in my city that has been operating for 4 years. You were smart taking down the post with names - when we first revealed this practice to our members at a general meeting, the perpetrator and his attorney were sitting in the front row making sure we didn't mention their name or impugn their character because the had not been indicted on any wrongdoing - and in fact would continue on for another 2 years, costing lenders over 120 million and scamming more than 12 million from local suckers.
All we can do is try to educate the public.
The industry must do a better job of self policing.
James - Absolutely