Operation Malicious Mortgage

If you have not yet heard, the department of Justice and the FBI announced last week that "Operation Malicious Mortgage" has been a success. Over 400 individuals are being charged for mortgage fraud. This operation focused on 3 main types of mortgage fraud. This includes lending fraud, foreclosure rescue scams, and mortgage related bankruptcy schemes.
The most common of these types is lending fraud. Misrepresenting someones income, altering documents, forging documents, etc.. all fall into this category. It is sad to say it, but apparently this was widespread. Not only were lenders making risky products available to the masses, fraud was being committed by loan originators who were putting people who don't qualify for these already risky programs into them anyway. This was done by altering the loan to fool underwriters! If that isn't a recipe for disaster, I don't know what is?

This effort to crack down is much needed. However, don't let this give you the idea that all lenders, brokers, and the like are crooked. This couldn't be further from the truth. Most of us do things the right way. There was just too much money out there to be had during the booming market. Fly by night lenders were coming out of the woodwork to do loans in order to capitalize. The problem is that these types of lenders were greedy and took advantage. The down market over the past couple years has already weeded the majority of these crooks out. With "Operation Malicious Mortgage" and other like it, the others will surely follow. This will definitely help in bringing respect back to the lending industry. It is just sad to say there is no doubt a long way to go!

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Professional Mortgage Group, Inc.
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