I am convinced how much time the government will take measures against mortgage brokers who are responsible for at least part of the collapse of the subprime mortgage industry. After following the accounts of several newspapers for this information, it will eventually happen and more to come. The problem with this market is that there is no regulation of mortgage brokers. We regulate banks, savings loan companies etc, but brokers do not. The reason is that they are not lenders but salespeople.
Please point at more fingers and play a blame game. Prosecutors in the Southern District of New York State announced that Rockland County mortgage and loan broker David Goldwasser punished New York's Key Bank and Port Chester New York's First Union Bank for nearly $ 500,000. Mr. Goldwasser acknowledged that filing a loan application for another party also submitted a company application with financial interest. He acknowledged that he submitted false financial documents such as false tax returns and bank broker notebooks. Not only can he be sentenced to imprisonment for up to 30 years, he may be asked for full compensation.
Another slightly different type of pending is concerned with a person called Port Washington NY's "Unauthorized Mortgage Broker." Jacob Milton has been accused of stealing the identity of others. ID theft is the fastest growing criminal wave, according to both FBI and U, S, postal service.
In addition to stealing the identity of an unspecified individual, Mr. Milton has been accused of buying two houses with his name and leaving more than $ 1 million in debt. For the presentation by the police, other victims are appearing. Some of them claim credit card fraud and other misconduct. The police probably believe there are hundreds of victims.
This type of fraud happens every day in every city and it can happen to you. It's interesting here, Mr. Milton is the director of a major mortgage company based in New York. No one is like a man without doubt.
Regarding potential mortgage fraud by an immoral broker, it should be seen with respect to the amount of prosecution. Please do not hold your breath. The membership of all mortgage broker associations in the US is less than 10% of the industry as a whole. But it is still enough to cause havoc in the banking world. Many brokers feel little or no responsibility because they put together some bad things in good stuff and bundle the loans. They will take their money and move.
However, there was an example of illegal misconduct. Orange County Directory (California) recently posted articles on mortgage brokers who submitted mortgage fraud. legal A Mexican family who could not speak English. Now this family is losing the house. Of course, you should find a mortgage broker that packaged it. A similar incident is being investigated here in Phoenix. In both cases, the broker was only interested in commissioning from the transaction.
Now I am a really bad guy who knows someone is saying mortgage brokers are autumn guys. There are mortgage brokers on our website. Most mortgage brokers are doing a great job. Brokers on our website are all big companies that truly care about the industry. It was the little "Johnnie Come LaTele" that caused most problems. They have not invested in the overall health condition of the industry, "Fast account" It looks.
Everyone is responsible for the problem. Brokers are only selling what people have asked for years. But just a few years ago, it was impossible to get this type of loan. The banking industry may need a prepayment that matches the loan back as it did over 20 years ago, but perhaps more people will not be able to possess their own house, but financial institutions have trouble . Republic of Arizona pointed out that this morning (10/23/7), Rep. Bernie Frank of the household finance committee submitted a bill requesting the banking industry to do this.
The fundamental cause of subprime is investment bank fraud. It is a bad business to design products that encourage people to cheat. This fraud (or disappointment if you like it) amounts to millions of dollars so that our country is accused and revised in the opinion of this author before all the financial collapse mothers suffer It must be.
Simply put, the solution is so simple that no one can see it. The current system is to boost the limits of production volume and sales volume. It also refers to providing credit to people who were unable to qualify 20 years ago. That part has been successful. It is quite bad that the ownership of the house has grown by a huge leap that no one can make angry.
But success has brought industrial attention to the wind and made some stupid decisions. Individuals and major sub-prime wholesalers in the investment banking sector have been careless and have forgotten lessons of maintaining loan volume and expanding credit without observing excellent business guidelines.
The risk of lending operations is easy to measure.
· Mortgage is at least 5,6000 years old
· In the long term, a formula for safe mortgage investment was calculated
· The calculation formula calculated with the 80% loan interest rate is a good risk if the borrower's credit is reasonable.
· There is no further complication.
However, every time you change the formula, the risk increases dramatically.
· Increase the value of the loan (inflation price is another problem)
· To sell, we will sell loan of adjusted interest rate for the first 5 years
· Long-term loans will be provided due to inflated prices
· Finally, those with extremely low credit standing provide credit to non-affordable houses.
By combining these elements, a package has been created that could explode our face. We need a commonsense approach.
Where does all of this end? Time will tell.
References: Republic of Arizona, Washington Post, OC Registration
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