Great series from the Miami Herald on the mortgage industry:
Gary Kafka, former body builder with a long rap sheet and violent past, wrote millions of dollars in mortgages in South Florida without ever applying for a state license.
Fresh out of prison after serving time for bank fraud, he never went through a criminal background check before selling loans. He never took a competency exam.
He never had to.
More than half the mortgage professionals registered in Florida — 120,563 — entered the industry this decade without being licensed by the state, The Miami Herald found.
Known as loan originators, they perform the same job as mortgage brokers but aren’t bound by the same rules.
Time and again, industry leaders asked Florida regulators to bring this group under their watch by imposing mandatory licensing. But regulators refused to press for any changes, claiming that lawmakers would never approve.
The state’s refusal proved costly during the biggest housing boom in Florida history: Thousands of loan originators entered the industry with criminal histories, state records show.
While The Miami Herald found breakdowns in the state’s licensing system for mortgage brokers, the lack of controls over originators created even more problems for an industry steeped in the highest fraud rate in the nation.
“Gary Kafka” — love the name. I suppose his brother, Franz, is still inside?
A review of thousands of pages of court documents, state industry reports, internal e-mails and police reports shows that from 2000 to 2007:
• 5,306 people with criminal histories became loan originators — a rate of nearly two a day. Worse, those include 2,201 who had committed financial crimes, such as fraud, money laundering and grand theft.
• Even large lenders hired loan originators with criminal backgrounds. The Miami Herald found that in at least 30 companies with 50 or more employees, more than one in five originators had a criminal record.
• Nearly two dozen people stripped of their licenses as mortgage brokers were able to sidestep regulators by becoming loan originators. Nine others who were denied licenses because of prior crimes or regulatory violations were able to do the same.
”It’s a huge hole,” said Ronald Brenner, a former Florida mortgage regulator who once led the agency’s Miami office. ”You could get the worst thief in the world, a fraudster to the nth degree, and when he gets out of jail he can come work at your mortgage operation, and if he doesn’t have a broker’s license, all the better.”
Another sack of pus. Wherever you look…
Maybe, instead of granting the telco executives retroactive immunity, we could just get them good-paying jobs in the Florida housing industry?
Front page
Many of the renters in foreclosed properties are the biggest
sufferers. They lose their first, last and security and must move within days (not weeks.) Many of these folks don’t have enough to scratch together another first, last and security to get back on their feet. They end up in shelters, cars or with family (if they’re lucky) and risk losing their jobs due to these horror story.
Very sad that our government is bailing out the perpetrators and punishing the victims.
I love this job!
Yes and They'll Get No Govt. Help
To the extent the Government bails out folks other than the big companies and rich people, it will be homeowners. Homeowners vote. They make political contributions. News media love to report on the middle-class family being evicted from their dream home. The renters most likely to be affected the most are the ones who live on the edge economically and nobody is going to care about them. If they lose their home, then there will be shelters and charity to help them, although not help them enough. But until then, they are too poor to have any clout that would get them help and not poor enough to qualify for the programs set up for the neediest (which are insufficient for those they are already serving).
One of the many problems we have in this country is a social net, weak and fraying, that only catches people at the very bottom, when they’re hardest to help. When a small boost could save them, there’s little out there for them.
Apt cartoon
I mean, who else are you going to call for help?