Every mortgage brokers has a simple choice:  Falsify the borrowers records or not?

Whether or not the borrower chooses to lie about their own income and/or buy more house then they can afford is a separate discussion.  Sure, borrowers want to have as much house as possible and yes, many borrowers focused only on monthly payments instead of the overall cost of the loan and house.   That said, the mortgage broker had a duty and an obligation to properly represent the borrowers financial picture.

In the press release below www.mortgagefraudblog.com, the broker, not the borrower, was the one to blame.

If I had a nickel for every time a mortgage broker told us that it was ALL THE BORROWERS FAULT, I’d be gazillionaire.

More and more frequently we are seeing patterns of deception at the broker level.  Greed and deception became just another part of the game for some of these clowns.

- The Bank Slayer

Million Dollar Judgment Issued Against Mortgage Brokerage

Access Mortgage Company, Inc. (Access Mortgage), Seattle, Washington, a mortgage brokerage, has been order by an Ada County, Idaho, judge to pay more than $1 million in penalties and restitution for violating Idaho laws relating to mortgage and financial fraud.

The district judge found that Access Mortgage had engaged in numerous violations of law, to include submitting a false mortgage loan application to a lender, violating an order previously issued against the company by the Department of Finance, misrepresenting information the company provided to the department, refusing to provide the department with information requested during an investigation of the company’s activities in Idaho, originating mortgage loans in Idaho through unlicensed mortgage loan originators on 405 occasions throughout the state with concentrations in Boise and northern Idaho, and failing to provide an elderly Idaho couple with required notices concerning closing costs the couple would be incurring on a mortgage loan obtained for them by Access Mortgage. In a related order, the district judge found that the company’s violations were “aggravated and serious.”

The judgment included a permanent injunction against further violations of the Idaho Residential Mortgage Practices Act and the Idaho Financial Fraud Prevention Act. Moreover, the judgment included a penalty amount of $1,055,000 entered against Access Mortgage, and ordered the company to pay restitution in the amount of $27,322.18 on behalf of the Idaho couple injured by the company’s violations.

Gavin Gee, Director of the Idaho Department of Finance, said he was pleased with the outcome of the lawsuit. “The court’s findings and entry of a million dollar plus money judgment against Access Mortgage sends a clear message to the mortgage industry that financial fraud and unlawful practices will not be tolerated in Idaho.”

The commission earned through yield spreads is one of the sickest most diabolic schemes the mortgage industry pulls on borrowers.  A Yield Spread is the extra commission the loan officer snags from the lender when they convince you to take a loan at a higher rate or with worse terms than for which you qualified.  In the words of Neil Garfeild, “This means the salesmen who sold you the loan product convinced you through misrepresentation of the loan that you will be better off with the worse loan. He knows it is worse but he gets paid for putting you in a worse loan.”

Want to see this in action?  Pull out your HUD from your closing.  The paper that shows all the money flowing.  Look on page 2 for items such as Origination Points, Discount Points, etc., and add up those fees you paid.  Now sniff around some more and look for items that say P.O.C. (paid outside of closing) and or YSP (yield spread premium).  If you find them they will typically have the amount in brackets OR off the main part of the calculation.  This amount is the “kicker” in commission for pointing you in the wrong direction.  

So he skews the facts and misdirects your attention until you come to “agree” that the worse the loan is the “better.”

The Bank Slayer