Mortgage Fraud Up in Georgia

Mortgage Fraud Up in Georgia

Posted on April 30, 2012

You’ve heard the saying – “If it sounds too good to be true, it probably isn’t.” That certainly holds true in the mortgage industry, where instances of fraud are increasing and it’s not just the lenders who are being hurt by instances of fraud.

According to an article on Georgia’s Department of Banking & Finance website, residential mortgage fraud, which cost millions of dollars to lenders, taxpayers and consumers, is becoming even more prevalent in Georgia.
“With sophisticated electronic document-preparation programs, unethical mortgage loan officers, brokers, real estate agents and lawyers can create fake FICO scores, fake tax returns, fake identities and obtain inflated appraisals. According to the FBI, based on existing investigations and mortgage fraud reporting, 80% of all reported fraud losses involve collaboration or collusion by industry insiders,” the article states.

While lenders are generally the victims of fraud, as they are held accountable for the costs, borrowers can be victims as well. One mortgage company told of an instance where a customer is stuck with a loan he can’t refinance or pay back. After receiving a fraudulent appraisal that greatly overvalued the home, he was persuaded to pay significantly more for the home than it was worth. The seller made a big profit but the buyer is stuck with a mortgage higher than the value of the property.

The best way to avoid any type of mortgage fraud, of course, is to deal with a reputable lender. You want to make sure that any company or individual you may be dealing with is licensed in your state by the Nationwide Mortgage Licensing System and is a certified Fannie Mae/Freddie Mac seller/servicer. You should also ask for names and contacts of recent clients and contact them for references. (For more on how to find a lender, see my column from April 16)

Ask questions. If your lender asks you to sign documents that contain false statements or if you see appraisals on a property that don’t seem in line with others in the neighborhood, ask about it. Or just walk away and report it to the Department of Banking and Finance.

If you’re unsure about any part of the process when obtaining a loan, seek help from the MBA Consumer Help Desk. This website has information and tips on identifying predatory lending and mortgage fraud and what to do if you encounter it. It also helps explain the process, as what is normal and ethical and part of obtaining a loan can seem foreign or strange to first-time homebuyers.

Because fraud is increasing rapidly with costs to lenders, taxpayers, consumers and communities, the FBI and MBA are taking it very seriously. The MBA is encouraging increased awareness and enforcement and with the FBI produced the FBI Mortgage Fraud Warning Notice into their loan processes. The notice warns that mortgage fraud is a federal offense that will be investigated by the FBI, and is punishable by up to 30 years in federal prison, a $1 million fine or both.

You can find out more on fraud on these websites:
• Georgia Real Estate Fraud Prevention & Awareness Coalition
• Mortgage Fraud Prevention and Resource Center of Mortgage Bankers Association (MBA)
• StopFraud.gov
— Cal Haupt, President and CEO of Southeast Mortgage

Phone: 770-279-0222
Website: www.southeastmortgage.com

Partnerships in Industry Benefit All - Southeast Mortgage

Partnerships in Industry Benefit All

Posted on April 23, 2012 by JD Crowe

Every month a few members of the Client Relationship Management team from Southeast Mortgage pack up their professional photography equipment and head to Alpharetta where they host a social for Realtors and take new headshots of anyone who wants one. The events have been very well received, as the Realtors enjoy socializing over hors d’oeuvres and updating their professional photographs.

This is just one of the many events we are involved in with our partners in the real estate industry, which include the Atlanta Chapter of the Women’s Council of Realtors (WCR), the Atlanta Board of Realtors and the North Atlanta Metro Association of Realtors (NAMAR). Some of our team members are certified instructors through the Georgia Association of Realtors (GAR) and provide Continuing Education courses and sponsor lunches for Realtor associations and individual real estate offices.

(l-r) Southeast Mortgage at a monthly meeting

for the Atlanta chapter of WCR.

At Southeast Mortgage we always strive to be good stewards of our industry. And these days we feel an increased sense of responsibility because there are so few mortgage providers left. In the past five years we have seen lender after lender and broker after broker go out of business for one reason or another.

At the height of our industry, there were more than 3500 mortgage brokers and lenders in Georgia. Now there are less than 750. That’s a decrease of about 80 percent. Because of this significant decrease in the number of companies available to provide mortgages, we feel an even greater sense of duty to partner with Realtors to provide the service that our mutual clients deserve.

One benefit of our sponsorships and partnerships with industry-related organizations is that we can continue to create a recognizable brand and let Realtors know that despite the continuous changes and widely publicized issues affecting our industry, Southeast Mortgage still consistently closes loans in eight days. We want our partners to know that we will maintain our level of service, despite our increasing volume of mortgage applications. We will continue to close loans within the term set in the contract.

—J.D. Crowe is Senior Vice President of Southeast Mortgage.

Call: 770-279-0222

Visit: www.southeastmortgage.com

Email:  ClientServices@southeastmortgage.com

Southeast Mortgage of Georgia, Inc. provides Platinum Sponsorship to Women's Council of REALTORS

April 19, 2012 - Southeast Mortgage of Georgia, Inc. provides Platinum Sponsorship to Women's Council of REALTORS-Atlanta.

“We are proud to sponsor the Women's Council of REALTORS-Atlanta.  They are an important part of our community” said Cal Haupt, President and Chief Executive Officer, Southeast Mortgage.

Call: 770-279-0222

Visit: www.southeastmortgage.com

Email:  ClientServices@southeastmortgage.com

Helpful Blog: http://southeastmortgage.blogspot.com/

SEM, Director of Morale, in a stand off with a Duck "Indentity Unknown" until ....

SEM the Cat is in a stand off with a Duck from an unknown origin. The Duck has found refuge on the roof of Southeast Mortgage at Club Drive in Atlanta, GA. Surprising end..

Finding the Right Lender

Finding the Right Lender

Posted on April 16, 2012 by Cal Haupt

A homeowner in Florida was puzzled to receive a condolence letter for his wife’s death from his mortgage lender. Why were they sorry for his loss? His wife was very much alive. But because their lender declared her deceased, they were unable to get a loan modification and despite repeated phone calls and a visit to the bank where the wife felt it was fairly obvious she was among the living, no changes were made. Their only loss was their credit score and they are suing the lender.

Yes, this is a rather extreme story. But it illustrates an important point. Choosing a lender you can trust is crucial. Sometimes people shop around by rate only, or just use a neighbor who is handling mortgages as a side business. They would rather be shopping for living room furniture for their new home than for a lender.

For most people a mortgage represents the biggest and longest-term debt they will ever incur. It’s much easier to swap out furniture you grow tire of than to get out of bad mortgage situation.
Last week in this column I wrote about how to lessen the frustration of applying for a mortgage. By far the most important step is to find a good lender that you can trust. Here are steps you can take to find the right one for you.

1. Make sure that any company or individual you may be dealing with is licensed in your state by the Nationwide Mortgage Licensing System.  This step ensures your mortgage professional meets the government’s consumer protection requirement for the mortgage industry. Go to www.nmlsconsumeraccess.org and enter the name of the person or the company for an instant report. This step takes only a minute or two and is a free service for consumers so you can confirm that the individual or company you are dealing with is authorized to conduct mortgage business in your state.

2. Interview your potential lender. A face-to-face meeting allows you the opportunity to judge whether you’ll feel comfortable with this person. Does he or she listen to you and understand what your needs are? You also have the opportunity to ask questions. Here are a few I suggest:
• Are you licensed by the NMLS and the state of Georgia?
• Are you a certified Fannie Mae seller/servicer, Freddie Mac seller/servicer or a HUD Title II Direct Endorsed lender?
If your lender answers yes to these questions, then he or she has achieved the highest certification possible for a lender.

3. Ask for names and contact information of recent clients. Contact these people and ask about their experience. Did they get good service? Did they receive the loan that was right for them? Did the closing go smoothly and was it on time?

— Cal Haupt, President and CEO of Southeast Mortgage

Call: 770-279-0222

Visit: www.southeastmortgage.com

Email:  ClientServices@southeastmortgage.com

Tips for Applying for a Mortgage

Tips for Applying for a Mortgage

Posted on April 9, 2012

While most of us have never had the unpleasant experience of sitting in a police interrogation room, fans of crime TV shows like me will recognize this scenario.

“I’ve already told you what I witnessed on the night of October 22, 2011 seven times,” says the frustrated and exhausted witness.

“Well, it’s time to tell it again,” says the cheery police office, as he asks the exact same questions for the eighth time.
I was reminded of this scene as I read the excellent article “The Perfect Loan File” on Forbes.com recently. One of the points the author, Mark Greene, makes is that mortgage customers can find the process of applying for a loan just about as frustrating. Why does the lender continue to ask for the same documentation over and over?

The truth is that due to many factors — increased federal regulations and stricter requirements enacted after the housing collapse just to name a few — the process of applying for a mortgage has become more complicated. There’s a lot of paperwork involved and a lot of moving parts in each application.
But applying for a mortgage doesn’t have to be painful. And it doesn’t have to be that frustrating. Here are a few tips for making the process go more smoothly.

1. Be realistic in your expectations. If you have glaring problems with your credit history or have total monthly debt ratios exceeding 40% of your monthly income, you may have trouble qualifying for a mortgage loan. If that’s the case, it’s best to work on your credit score and reduce your monthly debt first.

2. Give your lenders exactly what he or she asks for. While this may sound simple, it is at this point that a lot of problems and resulting frustration can occur. Say for example, the lender asks for copies of your tax returns for the last two years. You send the tax returns, but don’t send the accompanying schedules. If the lender asks for the tax return, he means the entire return. Don’t try to second-guess which parts of a document the lenders needs. Send all of it.

3. Accept that you will have to provide multiple copies of lots of documents. Cooperation is the key to a pleasant and successful mortgage application. Does everything you have to supply on your tax return make sense to you? There is important detail needed in the schedules that allows the underwriter to better understand your true repayment ability and income stream. It is in your best interest to supply the information requested.

4. Find a good lender that you can trust. This is the best tip I can offer you. The financial crisis of 2008 was created by careless lending practices and not putting the client first. On July 30, 2008, President George W. Bush signed into law the Secure and Fair Enforcement for Mortgage Licensing Act (the SAFE Act). The SAFE Act requires licensing or registration of loan originators to ensure a minimal level of competency in the origination of mortgage loans.

Finding the right lender will make all the difference in the mortgage application process and protect your family. You want to find one that is licensed by the Nationwide Mortgage Licensing System, which ensures that the lender has met the minimum proficiencies set by Congress. There are plenty more factors to consider when choosing a lender and my column next week will be devoted to how to find the right lender for you.

— Cal Haupt, President and CEO of Southeast Mortgage

Call: 770-279-0222

Visit: www.southeastmortgage.com

Email:  ClientServices@southeastmortgage.com

Pent-up Demand for Housing Leading to Bidding Wars

Posted on April 3, 2012

If you have noticed fewer For Sale signs in your neighborhood, you are not alone. Fewer and fewer houses are available for sale.

The housing market is starting to see the return of something we haven’t seen for six years — potential buyers engaged in bidding wars for homes. In a recent article, Bloomberg.com reported the story of one couple that offered $10,000 more than the asking price for a home and included a family portrait along with a letter detailing their desire to live in that neighborhood. They lost out to one of seven other bidders.

We haven’t seen a lot of bidding wars in Georgia yet, as our unemployment rates are still in recovery mode. But I predict they are on their way as there is definitely a pent-up demand for housing. There are several reasons for that, starting with the fact that homebuilders have pretty much stopped building new homes over the past four years. And many of the homes that are available are in bad condition, as they may have been short-sold or foreclosed on, and routine maintenance and repairs have not been done.

Plus at the end of 2011 around 22% of mortgage-holders in the United States are underwater on their homes, with Georgia (33%) and Florida (44%) being among the states with the highest level of negative equity, according to a release from CoreLogic. A lot of these homeowners are reluctant to put their homes on the market, knowing they would have to come up with a large check at the closing, should their home sell.

Consider this: 2.43 million homes were listed for sale in February, according to a recent report from the National Association of Realtors. That is about a third of the number of homes available for February in 2005, when U.S. home sales were at a record 7.08 million.

These conditions have led to an interesting trend we are seeing at Southeast Mortgage. In the past consumers would generally find a home they wished to purchase, sign a contract and then apply for their mortgage. Now we are seeing a large volume of applications for “To Be Determined” properties. Consumers are ready to buy and are getting pre-approved for mortgages, but are having a harder time finding an available and desirable property for purchase.

One big advantage of pre-approval, however, is that if you do find yourself in a bidding war for a home, your offer will carry a lot more weight than potential buyers who are not pre-approved. And you don’t even need to include a family portrait.

— Cal Haupt, President and CEO of Southeast Mortgage