If there was one major takeaway from the National Crime Prevention Council’s 2013 Mortgage Fraud Virtual Conference, it was this: The mortgage market, while no longer a wicked stepchild of the housing crisis, must still be carefully monitored. Though its tantrum-throwing days may be over, the $1.1 trillion government loan industry has the potential to cause serious economic damage should fraudulent mortgage activity persist unchecked.
“What is old is new again,” says Michael Stolworthy, Director of Fraud Prevention for the U.S. Department of Housing and Urban Development. “We’re starting to see some disturbing trends. The same old type of mortgage cases are coming up.”
False statements on loan applications, inflated appraisals, and loan modification schemes are just some of the ways fraud is reappearing in the mortgage market. And with government loans on the rise—the number of mortgages insured by the Federal Housing Administration has nearly doubled since 2006—the potential for mortgage fraud increases, especially among applicants in shaky financial condition.
“Back during the mortgage boom, people who had taken out second and third mortgages were living the champagne lifestyle on a beer budget,” says Robert Simken, a former real estate practitioner turned police officer in Eustis, Fla. “Now, those same people are living in homes that are underwater and willing to do just about anything to get out of their bind.”
Problems arise when that “anything” includes turning to loan counselors, lenders, and alleged real estate professionals who make promises they never plan to keep. “If an opportunity comes along that seems too good to be true and the little hairs on your neck stick up and say ‘danger,’ don’t just ignore them,” Simken warns.
Through public outreach campaigns and educational seminars, organizations like the National Crime Prevention Council stress the importance of using an accredited real estate professional when contemplating any property transaction. “Half the people haven’t checked the qualifications of the individual helping them buy a home,” says Ann Harkins, CEO and President of NCPC.
Simkens agrees that home owners should seek advice from a noted professional. “You don’t go to the butcher for brain surgery and you don’t go to a brain surgeon for chopped meat,” he says. “It’s important to find an expert and not just someone who shows up and can recite the jargon.” Continue reading »
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
The “Occupy” movement on Wall Street and in cities around the country (and throughout the world) has drawn people with a wide range of grievances—signage shows protesters demonstrating against war, immigration policy, high unemployment, income inequality, corporate lobbying, and a host of other issues. At a recent visit to Occupy D.C., however, I saw two key areas of focus emerging: the high cost of education and the housing crisis.
Occupy D.C. protests are centered in McPherson Square park, about two blocks from the White House and less than two miles from the NATIONAL ASSOCIATION OF REALTORS®’ D.C. building. A recent Huffington Post story estimated there were 120 tents, plus administrative facilities (a first aid tent, a meal area, a media tent, and so on). The group has a permit to occupy the park for eight months, according to one organizer who asked not to be named.
It’s a surprisingly well organized effort. There’s a daily schedule of events that starts with brainstorming sessions at 11 a.m. and ends with a general assembly at 6 p.m. In between is a sometimes incongruous mix of activities, including newcomer orientations and Tai Chi classes. (Saturday, a pumpkin carving party is planned.) Punctuating these activities are protest marches on various topics. Organizers are now planning a march, scheduled for Friday, to protest the student debt burden. Next week’s march focuses on affordable housing. Continue reading »
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
One of my favorite stories from last year was about Fran Hoover, ABR, GRI, with RE/MAX Masters in South Lake, Texas. For the past 15 years, Hoover has selected one client in dire financial need to work pro bono for every year.
When the market is as tough as it is now, it’s hard to imagine that anyone can afford to forgo a commission check and give up much of their valuable time. But since that article came out, I heard from many practitioners about how they also have done this or were hoping they could help in the future. Continue reading »
By Erica Christoffer, Contributing Editor, REALTOR® Magazine
In the world of architects, builders, and designers, the annual debut of the New American Home at the International Builders’ Show is an institution. For 27 years it has been the mainstay of the convention, the pinnacle for all things new, the height for which to reach – the cutting-edge, state-of-the-art, ultimate trend-setting home.
But this year there is no New American Home to tour at the show in Las Vegas. That’s because this year the realities of the economic climate have proven themselves heartbreaking once again.
The storm culminated with two blows against Adam Knecht, general manager of Domanico Custom Homes and builder of the 2010 New American Home. First, the original private financier dropped out in February 2009, just one month after construction began. Then, the tight lending environment made it impossible to secure adequate financing to finish the project. By October, construction was all together halted, followed by foreclosure in December. Thus, for the first time in the history of the program, the home was not completed in time for the show and proved to be a sign-of-the-times for the housing industry. Continue reading »