David Saks: Mortgage Fraud : I'm Sick of Hearing About it, Gumby !

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Mortgage Fraud : I'm Sick of Hearing About it, Gumby !



Here it comes.... I know your sick of it....but hang on...it's refresher time just to keep you vigilant.

Financial crimes are growing like poison ivy in Tarzan's backyard. Criminal activity in the United States is staggering in this arena and is one of the fastest growing crimes in America, outpacing the drug dealers.  Fraud involves two parties basically: one creep makes a false statement of fact material to the business involved and the other party relies on that statement to their detriment and loses their shirt.  In mortgage fraud false or inaccurate information presented with a mortgage application is provided and that information causes a lender or somebody else in the chain of approving the loan to make the loan or to make the loan on terms and conditions different than if the slimeball had told the truth.

 Mortgage fraud includes a whole collection of things sharing a common attribute representing illegal business dealings.  The different schemes that these despicable rats use include, but are certainly not limited to, property flipping, equity skimming, application fraud, credit or income misrepresentation or asset and down payment misrepresentation.  Mortgage industry professionals and law enforcement break these different schemes into two groups.   Fraud for housing and fraud for profit. We'll talk later about this.

What have been your experiences with this crime ? Have you got a story or two to share ?


David Saks

Time&Temp Memphis

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Comment balloon 4 commentsDavid Saks • June 01 2008 01:17AM


I volunteer for a consumer organization and we get thousands of complaints and inquiries annually about homebuilders.  They used to be mostly about construction defects and breach of warranty/contract.  Now, increasingly, there are problems with predatory or fraudulent lending where the buyer used the builder's in-house lender, or affiliated lender.  Some state's insurance depts have gone after builders and others for setting up sham co's to get illegal kickbacks, particularly title insurance kickbacks.  Some of the problems have been violations of RESPA such as illegally requiring a buyer use the builder's lender.  Some smaller, (probably less politically connected) builders have been indicted and tried or are facing trials.  But the operation doesn't seem to differ much from what some big builders are doing.  The bigger builders just seem to have better lawyers, and instead of facing prison, they pay a fine to HUD or whoever "without admitting wrong-doing."  The fines seem hefty to the average consumer but they're often a pittance to the corporation, and treated as a cost of doing business.  I've never had a problem with anyone getting as rich as they can get in this country--as long as they don't cheat!  Some of these co's are definitely cheating. 

Posted by CSch almost 12 years ago

You'll enjoy this, CSch, http://www.mortgagefraud.org/  I'd also like to hear more about the sham company exploits. What's the consumer organization you volunteer for ? Many thanks for your comments, also. You've got some real interesting thoughts and sharp observations.

Posted by David Saks ((retired)) almost 12 years ago

Great Post.  Thanks for Sharing!

Fraud hurts so many people on so many levels-it hurts us all in one way or another.

To help combat this disease, I created a group: Real Estate Fraud, Scams, and Ponzi schemes REPORT THEM HERE


Please feel free to post your blog there! 

Posted by Aida Pinto, Real Estate Broker (562) 884-6196 (Independent Real Estate Broker) over 11 years ago

Thanks, Aida. Honored to hear from you this fine day. Hope all is well for you.

Posted by David Saks ((retired)) over 11 years ago

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