How To Spot Mortgage Fraud #investment #property #mortgage


#mortgage fraud

#

How To Spot Mortgage Fraud

Ethical violations and criminal activities in various industries have affected our economy over the past few decades, particularly in the banking, financial and housing sectors. In this article we examine the complex ethical and criminal issues surrounding mortgage fraud. Fraud in its simplest form is deliberate misrepresentation and deception. Fraud in action means that one deceives another by misrepresenting information, facts and figures.

What is Mortgage Fraud?

Mortgage fraud is not just predatory lending practices that target certain borrowers. According to the Federal Bureau of Investigation (FBI) mortgage fraud is “material misstatement, misrepresentation or omission relating to the property or potential mortgage relied on by an underwriter or lender to fund, purchase or insure a loan.” With this working definition we see that mortgage fraud can be committed by both individual borrowers and industry professionals.

Why Commit Mortgage Fraud?

Borrowers and professionals are motivated to commit mortgage fraud for many reasons. We can describe most of those reasons by defining two primary factors–fraud for housing and fraud for profit.

Fraud for housing is committed by borrowers who, often with the assistance of loan officers or other lender personnel, misrepresent or omit relevant details about employment and income, debt and credit, or property value and condition with the goal of obtaining or maintaining real estate ownership. It is important to note that fraud for housing can be committed by individuals who intend to occupy a property as primary residence, or by investors who intend to rent the property as a source of income or to re-sell for gain.

Fraud for profit is committed by industry professionals who misstate, misrepresent or omit relevant details about their personal or their clients’ employment and income, debt and credit, or property value and condition with the goal of maximizing profits on a loan transaction. It is important to note here that fraud for profit can be committed by any professional in the loan transaction chain including the builder, real estate sales agent, loan officer, mortgage broker, credit/debt counselor, real estate appraiser, property inspector, insurance agent, title company, attorney, and escrow agent. Industry professionals can also work in concert, as a network, to defraud underwriters, lenders and borrowers, and maximize fees and share profits on all mortgage related services. These actions are motivated either by the desire to gain extra sales commissions or simply increase an investment position.

Common Mortgage Fraud Schemes and Scams

The most common investor mortgage fraud schemes are different types of property flipping, occupancy fraud and the straw buyer scam. Property flipping is generally not illegal when associated with purchasing a house, holding/fixing it and then reselling it for a profit. On the other hand, when a property is bought below market and immediately sold at profit with the help of a corrupt appraiser who “verifies” that the value of the property is actually double the initial purchase amount, mortgage fraud is indicated.

Occupancy fraud is a scheme used by investors to qualify for higher loan-to-value and lower out of pocket costs on purchases, in addition to lower mortgage rates. Occupancy fraud occurs when a borrower claims that the home will be owner-occupied in order to obtain favorable bank status, when the property will actually remain vacant. The straw buyer either uses their identity credit and income to obtain property for another buyer who may not qualify. Straw buyers are often used by investors, either willingly or unknowingly to cover up other forms and multiple layers of fraud.

The most common individual mortgage fraud scams are identity theft and income/asset falsification. Identity theft, where the real buyer fraudulently obtains financing using an unwilling and unaware victim’s information including Social Security numbers, birth dates and addresses. Identity theft for mortgage purposes may also include stolen pay stubs, bank records, tax returns, W2s and falsified employment verification letters. Even property ownership records can be falsified and a borrower can obtain a fraudulent mortgage on a property that they neither own nor occupy.

The most common industry professional mortgage fraud scams are the air loan and appraisal fraud. The air loan is a loan obtained on a nonexistent property or for a nonexistent borrower. A group of professionals will often work together to create a fake borrower, a chain of title on a nonexistent property, and to get a title and property insurance binder. Additionally, the fraud chain may include phone banks and mailboxes to create fake employment verifications, home addresses and borrower telephone numbers. The airloan scam simply puts cash into the hands of the perpetrators, and no property is ever bought or sold. Appraisal fraud often involves a real estate agent, builder, appraiser and loan officer working together to maximize a purchase price and loan amount in order to increase commission. On the other hand, corrupt appraisers will often undervalue a property to ensure that a fellow investor will be able to purchase the asset.

Some forms of predatory lending activities, foreclosure rescue and mortgage reduction scams depend heavily on the aforementioned mortgage fraud practices. Predatory lending typically involves falsifying lenders’ income figures to inaccurately reflect their ability to assume additional debt. Such activities heavily contributed to the Great Recession.

How does a Mortgage Fraud Scheme Work?

In this example of the same-day close property flipping scheme, the chain of title and the appraisal are often fraudulent and include three parties–the seller, the flipper and the unsuspecting end buyer. The seller makes contract with the flipper to purchase the property at below market value. The flipper provides the end buyer with a fraudulent title insurance commitment, showing the flipper as owner (though not the case) and an appraisal is made at the inflated price the flipper and end buyer have agreed on.

In several historic cases a Cincinnati loan processor used false income documentation, inflated appraisal values and fake companies to steal nearly $400,000. In Atlanta 10 people were convicted of using a network of loan officers, appraisers and straw buyers to perpetrate a $41 million property flipping scheme. Finally, in Detroit a group used identity theft to obtain signatures and personal information that were converted into a fake chain of title used to illegally sell properties between unsuspecting buyers and sellers.

Can Mortgage Fraud Be Combated or Stopped?

There is no shortage of legislation at the local, state or federal level designed to reduce mortgage fraud. States have taken a big step by requiring loan officer licensing and continuing education. Additionally, real estate, title and insurance agencies are licensed and monitored by government agencies. Many states also require periodic auditing of mortgage-lending companies’ activities and transactions to monitor compliance. Professional organizations such as the Mortgage Bankers Associations and National Association of Mortgage Brokers have a code of conduct and best practices that are peer-monitored. The FBI’s Economic Crimes Unit II also monitors complaints and suspicious activity in the mortgage industry.

How does Mortgage Fraud Affect the Markets?

To understand the implications for the housing and real estate industries, and for financial institutions, simply refer to the headlines and literature on the 2008 subprime mortgage crisis. A quick study of derivatives and mortgage-backed securities tells the stories of financial institution failures that followed speculative lending that was sometimes based on mortgage fraud.

The good news is we can improve the markets by reducing mortgage fraud. Individuals must set realistic expectations for borrowing and homeownership experience. Investors should set realistic goals for profit. Industry professionals must pursue higher personal standards and submit to peer organization accountability. Governments need to make legislation more uniform and reconcile law enforcement with active investigations.

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How To Spot Mortgage Fraud #home #mortgage #payment #calculator


#mortgage fraud

#

How To Spot Mortgage Fraud

Ethical violations and criminal activities in various industries have affected our economy over the past few decades, particularly in the banking, financial and housing sectors. In this article we examine the complex ethical and criminal issues surrounding mortgage fraud. Fraud in its simplest form is deliberate misrepresentation and deception. Fraud in action means that one deceives another by misrepresenting information, facts and figures.

What is Mortgage Fraud?

Mortgage fraud is not just predatory lending practices that target certain borrowers. According to the Federal Bureau of Investigation (FBI) mortgage fraud is “material misstatement, misrepresentation or omission relating to the property or potential mortgage relied on by an underwriter or lender to fund, purchase or insure a loan.” With this working definition we see that mortgage fraud can be committed by both individual borrowers and industry professionals.

Why Commit Mortgage Fraud?

Borrowers and professionals are motivated to commit mortgage fraud for many reasons. We can describe most of those reasons by defining two primary factors–fraud for housing and fraud for profit.

Fraud for housing is committed by borrowers who, often with the assistance of loan officers or other lender personnel, misrepresent or omit relevant details about employment and income, debt and credit, or property value and condition with the goal of obtaining or maintaining real estate ownership. It is important to note that fraud for housing can be committed by individuals who intend to occupy a property as primary residence, or by investors who intend to rent the property as a source of income or to re-sell for gain.

Fraud for profit is committed by industry professionals who misstate, misrepresent or omit relevant details about their personal or their clients’ employment and income, debt and credit, or property value and condition with the goal of maximizing profits on a loan transaction. It is important to note here that fraud for profit can be committed by any professional in the loan transaction chain including the builder, real estate sales agent, loan officer, mortgage broker, credit/debt counselor, real estate appraiser, property inspector, insurance agent, title company, attorney, and escrow agent. Industry professionals can also work in concert, as a network, to defraud underwriters, lenders and borrowers, and maximize fees and share profits on all mortgage related services. These actions are motivated either by the desire to gain extra sales commissions or simply increase an investment position.

Common Mortgage Fraud Schemes and Scams

The most common investor mortgage fraud schemes are different types of property flipping, occupancy fraud and the straw buyer scam. Property flipping is generally not illegal when associated with purchasing a house, holding/fixing it and then reselling it for a profit. On the other hand, when a property is bought below market and immediately sold at profit with the help of a corrupt appraiser who “verifies” that the value of the property is actually double the initial purchase amount, mortgage fraud is indicated.

Occupancy fraud is a scheme used by investors to qualify for higher loan-to-value and lower out of pocket costs on purchases, in addition to lower mortgage rates. Occupancy fraud occurs when a borrower claims that the home will be owner-occupied in order to obtain favorable bank status, when the property will actually remain vacant. The straw buyer either uses their identity credit and income to obtain property for another buyer who may not qualify. Straw buyers are often used by investors, either willingly or unknowingly to cover up other forms and multiple layers of fraud.

The most common individual mortgage fraud scams are identity theft and income/asset falsification. Identity theft, where the real buyer fraudulently obtains financing using an unwilling and unaware victim’s information including Social Security numbers, birth dates and addresses. Identity theft for mortgage purposes may also include stolen pay stubs, bank records, tax returns, W2s and falsified employment verification letters. Even property ownership records can be falsified and a borrower can obtain a fraudulent mortgage on a property that they neither own nor occupy.

The most common industry professional mortgage fraud scams are the air loan and appraisal fraud. The air loan is a loan obtained on a nonexistent property or for a nonexistent borrower. A group of professionals will often work together to create a fake borrower, a chain of title on a nonexistent property, and to get a title and property insurance binder. Additionally, the fraud chain may include phone banks and mailboxes to create fake employment verifications, home addresses and borrower telephone numbers. The airloan scam simply puts cash into the hands of the perpetrators, and no property is ever bought or sold. Appraisal fraud often involves a real estate agent, builder, appraiser and loan officer working together to maximize a purchase price and loan amount in order to increase commission. On the other hand, corrupt appraisers will often undervalue a property to ensure that a fellow investor will be able to purchase the asset.

Some forms of predatory lending activities, foreclosure rescue and mortgage reduction scams depend heavily on the aforementioned mortgage fraud practices. Predatory lending typically involves falsifying lenders’ income figures to inaccurately reflect their ability to assume additional debt. Such activities heavily contributed to the Great Recession.

How does a Mortgage Fraud Scheme Work?

In this example of the same-day close property flipping scheme, the chain of title and the appraisal are often fraudulent and include three parties–the seller, the flipper and the unsuspecting end buyer. The seller makes contract with the flipper to purchase the property at below market value. The flipper provides the end buyer with a fraudulent title insurance commitment, showing the flipper as owner (though not the case) and an appraisal is made at the inflated price the flipper and end buyer have agreed on.

In several historic cases a Cincinnati loan processor used false income documentation, inflated appraisal values and fake companies to steal nearly $400,000. In Atlanta 10 people were convicted of using a network of loan officers, appraisers and straw buyers to perpetrate a $41 million property flipping scheme. Finally, in Detroit a group used identity theft to obtain signatures and personal information that were converted into a fake chain of title used to illegally sell properties between unsuspecting buyers and sellers.

Can Mortgage Fraud Be Combated or Stopped?

There is no shortage of legislation at the local, state or federal level designed to reduce mortgage fraud. States have taken a big step by requiring loan officer licensing and continuing education. Additionally, real estate, title and insurance agencies are licensed and monitored by government agencies. Many states also require periodic auditing of mortgage-lending companies’ activities and transactions to monitor compliance. Professional organizations such as the Mortgage Bankers Associations and National Association of Mortgage Brokers have a code of conduct and best practices that are peer-monitored. The FBI’s Economic Crimes Unit II also monitors complaints and suspicious activity in the mortgage industry.

How does Mortgage Fraud Affect the Markets?

To understand the implications for the housing and real estate industries, and for financial institutions, simply refer to the headlines and literature on the 2008 subprime mortgage crisis. A quick study of derivatives and mortgage-backed securities tells the stories of financial institution failures that followed speculative lending that was sometimes based on mortgage fraud.

The good news is we can improve the markets by reducing mortgage fraud. Individuals must set realistic expectations for borrowing and homeownership experience. Investors should set realistic goals for profit. Industry professionals must pursue higher personal standards and submit to peer organization accountability. Governments need to make legislation more uniform and reconcile law enforcement with active investigations.

Comments are turned off for this post.


Lead Poisoning And The Brain – Cognitive Deficits And Mental Illness #lead #and #the #brain,


#

Lead Poisoning And The Brain – Cognitive Deficits And Mental Illness

By Michelle Naylor – Behavioural Health Sciences, Sydney University
Fact Sheet created 21 October 2005

Over the past few decades, research on the neurotoxic effects of lead has predominantly focused on cognitive deficits in children and infants. Evidence demonstrating various learning and behavioural problems resulting from lead exposure is voluminous, and links have been discovered between lead-poisoned children and deficits in a variety of functions.

Some problems observed in the classroom by Anne Winner (1994) that have been associated with lead poisoning include a mild decrease in IQ, slower response time, central auditory processing problems, word finding difficulties, sequencing difficulties, and perceptual integration problems.

Even at low BPb levels, lead exposure has been associated with deficits in the early developmental years. Canfield et al. s study (2003) on the effects of low level lead poisoning ( 10 �g/dL) on cognitive functioning in children and infants, found that IQ declined 7.4 points as average blood lead concentrations increased from 1 �g/dL to 10 �g/dL, and then declined 4.6 points for every 10 �g/dL increase after that.

These studies and others have provided strong support for the role of Pb as a neurotoxin in children and infants. So how do developmental disturbances caused by exposure to lead manifest later in life?

Young children and infants are the most vulnerable to the effects of lead poisoning. It can, however, have a detrimental effect on the cognitive abilities of adults as well.

A case study on adult monozygotic twins with lead poisoning, both who were retired painters, had typical patterns of cognitive difficulties following chronic lead exposure. This pattern included predominant impairments in the domains of attention/executive function, visuospatial/visual motor functioning, short-term memory, and (for one of the brothers) confusion and fatigue. After exposure to toxicants such as lead in adulthood, cognitive deficits tend to be specific, not generalized, and not affecting language centres in the brain (Weisskopf et al. 2004).

Lead exposure has also been linked to behavioural problems. In his landmark study, Needleman (1979) measured dentine Pb levels in 312 first-and second-grade students (mean age 7.3 years), and administered neurobehavioural tests. The results showed that behavioural and performance problems in primary school children were more prevalent with increasing dentine (teeth) lead levels. These behavioural problems included hyperactivity, distractibility, impulsivity, disorganisation, non-persistence, inability to follow simple instructions and overall poor functioning.

When the subjects were re-examined in 1988 (mean age 18.4 years), results showed that increased dentine Pb levels were associated with an increased risk of not graduating from high school, reading difficulties significant enough to be defined a disability, lower class standing in high school, increased absenteeism, lower vocabulary and grammatical-reasoning scores, increased reaction times, and slower finger tapping (Needleman, 1990). Lead levels were also inversely related to self-reports of minor delinquent activity. It was concluded on the basis of these results that exposure to lead in childhood is associated with deficits in neurobehavioural functioning later in life.

These and other studies such as those by Needleman (2002), in which elevated body bone lead concentrations were found to be associated with elevated risk for adjudicated delinquency, and Dietrich et al (2001), support the relationship between lead exposure and juvenile delinquency. Given these findings, and the results of studies such as those by Serene Olin and Mednick (1996) in which people with schizophrenia were more likely to have had behavioural problems before the onset of the disorder then the general population, it was only a matter of time before the effects of lead poisoning on psychological function were to be investigated.

The results from this study are consistent with the neurodevelopmental hypothesis of schizophrenia, which posits that the illness is related to abnormal brain development (Nopoulos et al, 1995; Marenco Weinberger, 2000).

At a conference in early 2004, research findings were presented on a study that examined the relationship between lead exposure during the second trimester of pregnancy and schizophrenia. The longitudinal study involved 20 000 people who were born between 1959 and 1967. The mothers were identified at their first prenatal visit, and blood samples were taken at every prenatal visit. The man who initiated the study, Jacob Yerushalmi had since died, and Opler et al. (2004) followed up the schizophrenia outcomes. Potential cases of schizophrenia spectrum disorder from Yerushalmi s study were identified using computerized records from inpatient, outpatient, and pharmacy databases. After standardized procedures involved in making or confirming diagnoses were carried out, forty-four of the seventy one cases established as having a schizophrenia spectrum disorder had second trimester maternal serum samples available for analysis. Because only serum samples, and, not whole blood specimens were available for analysis, an indirect biologic marker of lead exposure, d -aminolevulinic acid (d -ALA), was used to determine blood lead levels. Mid-pregnancy serum samples were sought for this analysis, because, unlike in the very early and very late stages of pregnancy, much more is known about the behaviour of d -ALA in the mid-pregnancy period. The results indicated that during mid-gestation, if levels of d -ALA are high (=15 �g/dL), the chance of having schizophrenia later in life is doubled.

On the basis of these results, the authors have suggested that more study is required to further establish, and to investigate possible biological mechanisms involved in the relationship between elevated blood lead levels during the second trimester of pregnancy and the development of schizophrenia.

The damage that lead poisoning can have on the neuropsychological functioning of the central nervous system can be devastating. It can affect anybody, at any age, although children are most often the worst affected, as their cognitive development can be disrupted. Now we are beginning to realize that there are consequences beyond what was once thought the neurological endpoint for this harmful substance, and hopefully we will one day fully understand the mechanisms by which lead destroys the mind.

  1. Canfield R, Henderson C, Slechta D, Cox C, Jusko T Lanphear B (2003) Intellectual Impairment in Children with Blood Lead Concentrations below 10�g per Decilitre The New England Journal of Medicine Vol. 348(16): 1517-1526, Massachusetts Medical Society, United States [LID 7088]
  2. Dietrich KN, Ris MD, Succop PA, Berger OG Bornschein RL (2001) Early Exposure to Lead and Juvenile Delinquency Journal of Neurotoxicological Teratology
  3. Vol. 23(6): 511-8, [LID 7402]
  4. Marenco S Weinberger DR (2000) The Neurodevelopmental Hypothesis of Schizophrenia: Following a Trail of Evidence from Cradle to Grave Developmental Psychopathology Vol. 12(3): 501-27
  5. Nopoulos P, Torres I, Flaum M, Andreasen NC, Ehrhardt JC Yuh WT (1995) Brain Morphology in First-Episode Schizophrenia American Journal of Psychiatry Vol. 152(12): 1721-3
  6. Needleman HL, Gunnoe C, Leviton A, Reed R, Peresie H, Maher C Barrett P (1979) Deficits in Psychologic and Classroom Performance of Children with Elevated Dentine Lead Levels The New England Journal of Medicine Vol. 300(13): 689-695, [LID 7454]
  7. Needleman HL, McFarland C, Ness RB, Fienberg SE Tobin MJ (2002) Bone Lead Levels in Adjudicated Delinquents: A Case Control Study Neurotoxicology and Teratology Vol. 24(6): 711-717
  8. Needleman HL, Schell A, Bellinger D, Leviton A Allred EN (1990) The long-term effects of exposure to low doses of lead in childhood: An 11-year follow-up report The New England Journal of Medicine Vol. 322(2): 83-88
  9. Opler MGA, Brown AS, Graziano J, Desai M, Zheng W, Schaefer C, Factor-Litvak P Susser ES (2004) Prenatal Lead Exposure, d -Aminolevulinic Acid and Schizophrenia Environmental Health Perspectives Vol. 112(5), [LID 7408]
  10. Serene Olin S Mednick S (1996) Risk Factors of Psychosis: Identifying Vulnerable Populations Premorbidly Schizophrenia Bulletin Vol. 22(2): 223-40 [LID 7462]
  11. Swan N (interviewer); Opler MGA, Susser E Jones P (2004) Schizophrenia Risks The Health Report, Radio National, Australian Broadcasting Commission (ABC) March 8, 2004 [LID 7409]
  12. Weisskopf MG, Howard H, Mulkern RV, White R, Aro A, Oliveira S Wright RO (2004) Cognitive Deficits and Magnetic Resonance Spectroscopy in Adult Maonozygotic Twins with Lead Poisoning Environmental Health Perspectives Vol. 112(5)
  13. Winner A (1994) The Early Lead Poisoned Child in the Classroom: Symptomatology and Intervention for School Psychologists and School-Based Personnel, in LEAD Action News Vol. 2(3), The LEAD Group Inc, Australia [LID 322]

The LEAD Group Inc. Fact Sheet Index


Shot at the Spot’ Contest and Sweepstakes #jgwentworth.com/shotatthespot/,‘shot #at #the #spot’ #contest #and #sweepstakes,sweepstakes,big #sweepstakes,daily


#

Jgwentworth.com ‘Shot at the Spot’ Contest and Sweepstakes

Sweepstakes is closed. Win Cash Sweepstakes is Hard $50,000

Sweepstakes is posted on : January 16, 2016
Sweepstakes is available between : 11 January 2016 – 9:00am – 11 March 2016 – 11:59pm
Local : (50) United States and District of Columbia

877-CASH-NOW is J.G. Wentworth famous and favorite opera of the 21st century. It’s a time to record your own version of the 877-CASH-NOW jingle and share it in J.G. Wentworth ‘Shot at the Spot’ Contest and Sweepstakes for a chance to win your share of $50,000 in prizes. You can also win 1 of nine $500 cash prize by giving vote for your favorite jingle video.

Limit: Per day, you can get five entries during promotion period. The age of entrant must be 18 years old or older at the time of entry.

There are two ways to get entry in to the Contests and Sweepstakes.

A) Video Submission Entry:

Online: During promotion period, visit jgwentworth.com/shotatthespot/ and click on video submission button. On the landing page, enter your email address and get registration form. Complete and submit registration form with all required details and upload video of featuring J.G. Wentworth branded TV commercial. Video submission cannot exceed 500MB.

In-Mall Kiosk on January 16, 2016: In order to participate in the contest, visit the hosted event located in the Mall of America on January 16, 2016 and complete and submit official Contest registration form with all required details like Full Name, Complete Mailing Address, Email Address, Phone Number and “Are you receiving regular payments from an insurance company? Upon completion of the Contest registration form, you will have to visit the kiosk area to record your version of the J.G. Wentworth 877-Cash now jingle.

B) Video Submission Contest Public Vote and Voter Sweepstakes:

If you don’t want to submit your video, then here is also chance to win weekly sweepstakes cash prize by voting for your favorite videos during promotion period.

Video submission First Prize: $30,000 check

Video submission Second Prize: $10,000 check

Video submission Third Prize: $5,500 check

(9) Sweepstakes Prizes: $500 check


Portable Air Conditioners #portable #air #conditioner #rentals, #spot #cooler, #portable #ac, #computer #room #air #conditioner,


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Why Buy From Us
1) Best Product Available
2) Best Value
3) Competitively Priced
4) Reliable Service
5) US Family Owned Business
6) PROUDLY MADE IN THE USA!

Shipping Depots
California
New York
Texas
Washington D.C.

As summer approaches and temps reach the 90s and even 100s, portable AC units, aka spot coolers are an efficient option, especially if space is an issue. Cool when you need it, where you need it!

Operating computers at improper temperatures can take its toll, and pose risks such as overheating, which could lead to server crashes or serious damage. Servers also generate large amounts of heat, and the humidity can lead to corrosion or rust. This can also keep your employees happy, which in turn promotes worker productivity and numerous health benefits!

Our portable air conditioner units and portable air conditioning spot coolers are made in the USA! Cold Air Products’ American made spot coolers are perfect for cooling computer server rooms and more and are available as rentals or for purchase. Contact us today and let us put our portable air conditioners to work for you!

Moveable systems are ideal for cooling down server rooms, as traditional ones require more energy and money. In addition, they generate round-the-clock air conditioning that central A/C or window conditioners may not feasibly provide. Whether you need a temporary solution or have a long-term goal, portable units can help keep your office, church, or school from overheating during the summer months. They are available to rent or purchase, and are versatile to your cooling needs.

Commercial Industrial Portable AC Units *

Perfect for cooling computer server rooms and much more.

Available as rentals or for purchase.

*These units are not intended for home use.

Effective Uses Portable Air Conditioners and Spot Coolers
When traditional air conditioning can’t accomplish your cooling needs, a highly efficient portable air conditioning system may be just what’s needed to keep everyone, and everything, cool. Server room air conditioning is a big concern for businesses with server equipment that generates enough heat that the equipment could become damaged. To attempt to cool a room like this with traditional air conditioning would be a huge expense of energy and funds. Proper server room air conditioning can be achieved, however, if a portable air conditioning system is used. The required temperatures will be met affordably and efficiently.

Why Customers Choose Cold Air.net for Their Portable Air Conditioning Needs
Purchasing ac units from Cold Air.net means that you are buying from a USA based company. We will ensure that the system you buy is quiet, efficient and of the highest quality.

Copyright 2012, Cold Air Products.
Cold Air Products is a division of Stokley’s Services, Inc.


How To Spot Mortgage Fraud #best #home #loan #rates


#mortgage fraud

#

How To Spot Mortgage Fraud

Ethical violations and criminal activities in various industries have affected our economy over the past few decades, particularly in the banking, financial and housing sectors. In this article we examine the complex ethical and criminal issues surrounding mortgage fraud. Fraud in its simplest form is deliberate misrepresentation and deception. Fraud in action means that one deceives another by misrepresenting information, facts and figures.

What is Mortgage Fraud?

Mortgage fraud is not just predatory lending practices that target certain borrowers. According to the Federal Bureau of Investigation (FBI) mortgage fraud is “material misstatement, misrepresentation or omission relating to the property or potential mortgage relied on by an underwriter or lender to fund, purchase or insure a loan.” With this working definition we see that mortgage fraud can be committed by both individual borrowers and industry professionals.

Why Commit Mortgage Fraud?

Borrowers and professionals are motivated to commit mortgage fraud for many reasons. We can describe most of those reasons by defining two primary factors–fraud for housing and fraud for profit.

Fraud for housing is committed by borrowers who, often with the assistance of loan officers or other lender personnel, misrepresent or omit relevant details about employment and income, debt and credit, or property value and condition with the goal of obtaining or maintaining real estate ownership. It is important to note that fraud for housing can be committed by individuals who intend to occupy a property as primary residence, or by investors who intend to rent the property as a source of income or to re-sell for gain.

Fraud for profit is committed by industry professionals who misstate, misrepresent or omit relevant details about their personal or their clients’ employment and income, debt and credit, or property value and condition with the goal of maximizing profits on a loan transaction. It is important to note here that fraud for profit can be committed by any professional in the loan transaction chain including the builder, real estate sales agent, loan officer, mortgage broker, credit/debt counselor, real estate appraiser, property inspector, insurance agent, title company, attorney, and escrow agent. Industry professionals can also work in concert, as a network, to defraud underwriters, lenders and borrowers, and maximize fees and share profits on all mortgage related services. These actions are motivated either by the desire to gain extra sales commissions or simply increase an investment position.

Common Mortgage Fraud Schemes and Scams

The most common investor mortgage fraud schemes are different types of property flipping, occupancy fraud and the straw buyer scam. Property flipping is generally not illegal when associated with purchasing a house, holding/fixing it and then reselling it for a profit. On the other hand, when a property is bought below market and immediately sold at profit with the help of a corrupt appraiser who “verifies” that the value of the property is actually double the initial purchase amount, mortgage fraud is indicated.

Occupancy fraud is a scheme used by investors to qualify for higher loan-to-value and lower out of pocket costs on purchases, in addition to lower mortgage rates. Occupancy fraud occurs when a borrower claims that the home will be owner-occupied in order to obtain favorable bank status, when the property will actually remain vacant. The straw buyer either uses their identity credit and income to obtain property for another buyer who may not qualify. Straw buyers are often used by investors, either willingly or unknowingly to cover up other forms and multiple layers of fraud.

The most common individual mortgage fraud scams are identity theft and income/asset falsification. Identity theft, where the real buyer fraudulently obtains financing using an unwilling and unaware victim’s information including Social Security numbers, birth dates and addresses. Identity theft for mortgage purposes may also include stolen pay stubs, bank records, tax returns, W2s and falsified employment verification letters. Even property ownership records can be falsified and a borrower can obtain a fraudulent mortgage on a property that they neither own nor occupy.

The most common industry professional mortgage fraud scams are the air loan and appraisal fraud. The air loan is a loan obtained on a nonexistent property or for a nonexistent borrower. A group of professionals will often work together to create a fake borrower, a chain of title on a nonexistent property, and to get a title and property insurance binder. Additionally, the fraud chain may include phone banks and mailboxes to create fake employment verifications, home addresses and borrower telephone numbers. The airloan scam simply puts cash into the hands of the perpetrators, and no property is ever bought or sold. Appraisal fraud often involves a real estate agent, builder, appraiser and loan officer working together to maximize a purchase price and loan amount in order to increase commission. On the other hand, corrupt appraisers will often undervalue a property to ensure that a fellow investor will be able to purchase the asset.

Some forms of predatory lending activities, foreclosure rescue and mortgage reduction scams depend heavily on the aforementioned mortgage fraud practices. Predatory lending typically involves falsifying lenders’ income figures to inaccurately reflect their ability to assume additional debt. Such activities heavily contributed to the Great Recession.

How does a Mortgage Fraud Scheme Work?

In this example of the same-day close property flipping scheme, the chain of title and the appraisal are often fraudulent and include three parties–the seller, the flipper and the unsuspecting end buyer. The seller makes contract with the flipper to purchase the property at below market value. The flipper provides the end buyer with a fraudulent title insurance commitment, showing the flipper as owner (though not the case) and an appraisal is made at the inflated price the flipper and end buyer have agreed on.

In several historic cases a Cincinnati loan processor used false income documentation, inflated appraisal values and fake companies to steal nearly $400,000. In Atlanta 10 people were convicted of using a network of loan officers, appraisers and straw buyers to perpetrate a $41 million property flipping scheme. Finally, in Detroit a group used identity theft to obtain signatures and personal information that were converted into a fake chain of title used to illegally sell properties between unsuspecting buyers and sellers.

Can Mortgage Fraud Be Combated or Stopped?

There is no shortage of legislation at the local, state or federal level designed to reduce mortgage fraud. States have taken a big step by requiring loan officer licensing and continuing education. Additionally, real estate, title and insurance agencies are licensed and monitored by government agencies. Many states also require periodic auditing of mortgage-lending companies’ activities and transactions to monitor compliance. Professional organizations such as the Mortgage Bankers Associations and National Association of Mortgage Brokers have a code of conduct and best practices that are peer-monitored. The FBI’s Economic Crimes Unit II also monitors complaints and suspicious activity in the mortgage industry.

How does Mortgage Fraud Affect the Markets?

To understand the implications for the housing and real estate industries, and for financial institutions, simply refer to the headlines and literature on the 2008 subprime mortgage crisis. A quick study of derivatives and mortgage-backed securities tells the stories of financial institution failures that followed speculative lending that was sometimes based on mortgage fraud.

The good news is we can improve the markets by reducing mortgage fraud. Individuals must set realistic expectations for borrowing and homeownership experience. Investors should set realistic goals for profit. Industry professionals must pursue higher personal standards and submit to peer organization accountability. Governments need to make legislation more uniform and reconcile law enforcement with active investigations.

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