Docstoc

Mortgage Fraud

Document Sample
Mortgage Fraud Powered By Docstoc
					Spring Caravan
  Mark Fagergren
Licensing/Education Director
    Spring Caravan?


“Can you tell me how to
 get a home put on the
         tour?”
Real Estate Live
     Chat
 “ Hot Topics”
Real Estate

              5
       Inactive licensees
           must renew
Real Estate

              4
      Expired inactive
         licensees
           MUST
        complete CE
         Real Estate
3 No more paper change cards
               Real Estate
Paper change cards will be accepted for
Principal Broker status changes or legal name
changes
            Real Estate

2   Complete CE by
the 15th of the month
“We bank CE credits daily.”
             Real Estate
Deposited ( Pending) vs. Banked (Posted)
             Real Estate
Banked hours can
be viewed in
RELMS account
           Year Renewal Cycle
 Twocompleted by the 15 to ensure on-time renewal.
CE must be                       th

                   License Issued for Two Years
           Take RC110832    Renewal Window Opens
         REPC 3 Hour Course

    Take RC101209                                  Take RC110423
  Fraud 3 Hour Course                           Caravan 3 Hour Course


   Take R110378                                         Take R112835
 Tech 1 Hour Course                                 Appraisal 3 Hour Course
                                                                     Provider Ten
                                                                     Day Banking



          Take R120413
        FHA 2 Hour Course
                            OneTake RC101253
                                Year
                             Ethics 3 Hour Course
Two Year Renewal Cycle
                                      I
  “I know it’s the 29th but I’m sure th can finish my CE in time.”
  “6 weeks until Licenseby the day to still expiration. renewal.
                    my license expires. I ensure
 CE mustTake CE Courses the 15 beforehave enough time.”
             be completed Issued for Two Yearson-time
        “I should start taking
             my classes.”
     “I can take my                                  Take RC110423
     classes later.”                              Caravan 3 Hour Course




                                                                    x
                                                    “I have plenty of time to
“I’ll take my CE                                        complete my CE.”
  next month.”
                                                                     Provider Ten
                                                                     Day Banking




   “I think my license
    might need to be              “I don’t need to worry
                             One Year
  renewed this year.”             about education now.”
            Real Estate
1 “Live” Posting vs
Time Delay Banking
 Utah Sales
   Agent
  License
Renewal Fee
     $42
Arizona (2 Year)       $200
                      +$152

California (2 Year)    $245
                      +$197

Colorado (2 Year)      $114
                      +$66
Idaho (2 Year)      $160
                   +$112

Montana (1 Year)    $87.50
                   +$127

Nevada ( 4 Year)    $280
                   +$92
Wyoming ( 2 Year)     $250
                     +$202



+$135 Average   181% Higher
            Mortgage
• Lending Manager License

   Qualification Requirements

     New Application Rules (pending) and
      Forms:
 • Mortgage Call Reports
     are required to be
submitted to the NMLS for
   the third quarter data
(July 1 – September 30)
         are due by
   November 14, 2012
Mortgage Call Reports contain two
components:

  1. Residential mortgage loan
     activity.

  2. Financial Condition.
Financial
Condition
 Reports
• Additional information and samples can
  be found at:
http://mortgage.nationwidelicensingsystem.
  org/slr/common/mcr/Pages/default.aspx
May 8, 2012- Independent
 Loan Processors are required
 to be licensed

 –Loan processors who are
  employed (W2)
–Independent loan processors
 (1099)



–Independent loan processors
 must be licensed but NOT
 sponsored (inactive).
Mortgage Loan
  Originator
 Renewal Fee
     $78
Arizona (1 Year)       $250
                      +$172

California (1 Year)    $300
                      +$222

Colorado (1 Year)      $80
                      +$2
Idaho (1 Year)      $200
                   +$122

Montana (1 Year)    $400
                   +$322

Nevada (1 Year)     $125
                   +$47
Wyoming ( 1 Year)      $120
                      +$42



+133 Average        70 % Higher
   Appraisal


• Newsletter article
The Appraisal Qualifications
Board (AQB) has recently
enacted some changes to
licensing criteria that will take
effect on January 1, 2015.
 There are NO
EXCEPTIONS to
     these
 requirements.
1. College level education
 for all Licensed
 Appraisers – 30 semester
 credit hours from a
 college or university OR
 an Associate’s degree or
 higher in any field.
2. College level
 education for all Certified
 Residential Appraisers –
 Bachelor’s degree or
 higher in any field from
 an accredited college or
 university.
3. Trainee Appraiser
    and Supervisory
   Appraiser Course
 (required attendance)
 with specifications for
  course content to be
   established by the
          AQB.
Existing credential holders are ONLY
required to meet these new college
education standards IF they
supervise/train new trainees and/or
change a licensing credential.
The future of the appraisal industry:

1. New education requirements from
   the AQB
2. Difficulty obtaining field experience
3. Restrictions on the use of trainees
   and licensees by lenders and
   government sponsored enterprises
4. Higher underwriting standards
5. Increased litigation and
   disciplinary actions taken against
   appraisers
6. Higher insurance requirements
7. Lack of motivation to increase
   appraisal efficiency ( failure to
   innovate)
According to the ASC website, there are currently
107,345 credentialed appraisers in the country
      Age of Appraisers: 2012
          Utah DRE Statistics

             3%   2%
 20%
                              26%
                                    25-29
                                    30-39
                                    40-49
                                    50-59
                                    60-69
                                    70 & Above
25%
                        24%
 Certified General Appraisers
            UT DRE Statistics - 2012
              4%   2%
                               20%         25-29
26%
                                           30-39

                                           40-49

                                           50-59

                                           60-69

                                           Above 70

                                     21%


      27%
        Certified Residential
           UT DRE Statistics

            2% 2%
  19%                    22%


                                25-29
                                30-39
                                40-49
                                50-59
                                60-69
                                70 and above

27%
                        28%
            Licensed Appraisers
                 UT DRE Statistics

            7%   1%    8%
      10%

                                      25-29
                                      30-39
                                      40-49
                                      50-59
18%                                   60-69
                                      70 and above
                                56%
 Certified General
Certified Residential
Renewal Fee $ 400
Arizona (2 Year)      $425
                      +$25

California (4 Year)    $435
                      -$182.50

Colorado (3 Year)      $240
                      -$240
Idaho ( 1 Year)     $350
                   +$300

Montana (1 Year)    $515
                   +$630

Nevada               $420
                    -$60
Wyoming ( 2 Year)       $500
                       +$100



+$82 Average        20% Higher
       All Licensees

• Take a RELMS class

• E-mail from an appraiser
QUESTIONS?
  Mortgage Fraud

DRE Investigators
  Marv Everett
 Travis Cardwell
               Fraud of the Past
   White out fraud
   False documents
   Equity skimming
   Illegal flipping
   Straw buyers
   False advertising
What’s Trending?
           Unlicensed Activity
           Loan officer assistants
           Real estate agents doing loan
            modifications
           New companies offering
            modifications


           Referral Fees
            Don’t get caught. We know
            it’s happening.
Loan Modifications
            No up front fees
            No pay until lender and
             borrower agree to terms
            Must have a loan
             originator license
            Don’t disguise up front
             fees with other services
Misleading Advertising
                Investigations
   We investigate every complaint we receive
   Records must be made available
   If the circumstances of the complaint are serious
    enough, we will pursue a criminal indictment not
    just a fine and a license revocation
   Recent Fortified Financial Arrest
   Currently working with the FBI, IRS, Attorney
    General, and US Attorney
      Investigations Continued…
   We are seeking an arrest on several cases
    currently being worked
   All actions taken by the Division are now being
    uploaded to the NMLS Regulatory Action
    Section and not just the Division Newsletter
       What’s Coming your way?
   New language regarding company Incentive
    Program
   NMLS Audits
   Surprise Visits by Marv and Travis
Questions??
DIVISION OF REAL ESTATE
   APPRAISER INVESTIGATORS

Craig Livingston
 Ken Wamsley
   Jim Bolton
TYPES OF COMPLAINTS &
WHERE THEY COME FROM
    WHERE COMPLAINTS COME
            FROM
   Other Government Agencies
   Home owners
   Other appraisers
   Lenders & Mortgage Companies
   Real Estate Agents
   Division of Real Estate
   Assessors
          Government Agencies
   HUD Policy:
    Suspension or deficiencies
    found in appraiser reports
    will be referred to state
    regulators
            Government Agencies
   We, most likely, will only look
    for USPAP (Uniform
    Standards of Professional
    Appraisal Practice) violations
        OTHER GOVERNMENT
            AGENCIES
   FREDDIE MAC
     Government sponsored
      enterprise
     Not as many as in the past
             HOME OWNERS
   My home is worth what???

    This is where large number of
    our complaints come from
           HOME OWNERS &
            COMPARABLES
   “Appraiser used wrong comparables.”

   Homeowner may know of other comparables.
             HOME OWNERS
                 cont.
   It’s a hard time for everyone, appraisers too
   Remember, if it weren’t for them you
    wouldn’t be doing an appraisal
   “Ms. or Mr. Appraiser was there for less than
    10 minutes”
   OTHER COMPLAINTS cont.
 Other   Appraisers
   Review appraisers
   Appraisers did the same property

   Appraisers from different geographic areas
 OTHER COMPLAINTS cont.
Remember when you accept an assignment,
you are saying you are competent to work in
a particular area, this is your responsibility.
         USPAP REQUIREMENTS
    Acquiring Competency
    1.   Disclose the lack of knowledge and/or
         experience before accepting assignment
    2.   Take all steps necessary or appropriate
         to complete the assignment competently
    3.   Describe in the report the lack of knowledge
         and steps taken to complete the assignment
         competently.
         OTHER COMPLAINTS
                cont.
 Lenders,      Mortgage Companies
     Low appraisal affects loan closing
 Real    Estate Agents
   Offer failed due to low appraisal
   Wrong comparables

 Division      of Real Estate
     Spin off from another complaint
            OTHER COMPLAINTS
                  cont.
   County Assessors
       Tax Appeals
        Not complying with State Statute
         Violating USPAP
RULE REQUIRING APPRAISERS TO
          RESPOND
   Rule R162-2g-502a (1)(h) requires you to respond
    to the Division within 10 days

       Possible $5,000.00 violation
  REASONABLE & CUSTOMARY
           FEES
Dodd-Frank Act
 AMCs required to pay reasonable and customary fees.
 Federal agencies have exclusive authority to interpret and
  adopt regulations regarding reasonable and customary fees.
 The Attorney General's Office may enforce the reasonable
  and customary fees provision.
 The Division is accepting complaints. If evidence is found
  to support an action, it will be referred to Division’s
  Assistant Attorney General for further review and action.
  THANK YOU

QUESTIONS ???????
Division of Real Estate
Enforcement Investigators

• David Mecham
• Carlos Alamilla
• Kurtis Hughes
Problem areas
• Trust Account Violations
• Unlicensed Short Sale Negotiations
• Short Sale / Foreclosure Rescue
 Scams
Trust Account Violations
• Trust Accounts are being used as a personal
  ATM for the Brokerage or broker’s personal use
If an employee carries out
 a scheme to steal trust
 account money from the
 brokerage, the broker is
 still the responsible
 person.
Recent investigations of
multiple brokerages have
shown the amount of
missing trust account
monies from those
brokerages is approaching

$1,000,000.00
How does the money go missing?
 • Broker allows cash to be accepted
 • Broker has a debit card attached to the
     trust account
 •   Broker fails to reconcile monthly
 •   Broker assigns an employee to oversee the
     property management account and the
     employee embezzles monies
 •   Broker reviews an Excel spreadsheet
     created by the accountant and not the
     bank statement
• A process where the real estate
 agent/s and/or other parties set
 out to defraud lenders by
 siphoning monies intended for
 the short sale lender then divert
 these monies for their own use.
 Lenders are led to believe these
 are legitimate charges as part of
 the short sale.
• A process where complicit real estate
 agents and/or real estate investors
 will knowingly submit low-ball offers
 to the short sale lenders trying to
 convince these lenders that the
 properties are worth much less than
 the current market supports; at the
 same time marketing the properties
 to buyers for many thousands of
 dollars more. cont…
• The short sale lender is usually not
 aware that there is another
 transaction for more money that will
 close simultaneously or shortly after
 the approval of the short sale.
Foreclosure Process


   Owners           Existing mortgage    Behind on Payments




   Transfer Title     Foreclosure       NOTICE OF DEFAULT
Short Sale Foreclosure Rescue Scam


 Owner        Behind on Payments         NOTICE OF       Real Estate Agent
                                          DEFAULT




 False Preliminary
      HUD’s            False Liens / False Tax Liens        Straw Buyer
                                                            Dummy Offer




                                            Real HUD’s       Agent Skims the
 Stall Foreclosure       Real Buyer
                                                               Difference
Thank you. . .


       Questions?

				
DOCUMENT INFO
Categories:
Tags:
Stats:
views:2
posted:6/13/2012
language:English
pages:103