Sense on Cents

Last August, our friends at 12th Street Capital highlighted the strong likelihood of increased mortgage fraud by brokers originating loans with FHA insurance. In my piece “Fair and Fraudulent Mortgage Lending,” I referenced the stellar work and perspectives provided by KD and his 12th Street team. I wrote:

Where can one go to receive a fair deal in the process of getting mortgage financing? What parts of the mortgage market may represent the next wave of fraud? Which firms may currently be involved in these frauds?

Major “high five” to KD and our friends at 12th Street Capital for providing tremendous perspectives on these topics this morning. KD writes:

From the Fair Mortgage Collaborative website . . .

The Fair Mortgage Collaborative is a nonprofit membership organization whose members are individually and collectively committed to providing low and moderate income and minority homeowners and homebuyers access to mortgages with the consumers’ best interests at its core, at a fair rate of compensation. Our approaches and standards work for all homeowners and homebuyers.

KD’s comment: “While I certainly applaud their effort, I would make the friendly suggestion they should be looking at FHA lenders and Reverse Mortgage lenders in particular . . . for those are the bastions of future (and current) abuses.”

What do we learn today, five months later? The Wall Street Journal reports on a number of mortgage firms being subpoenaed for the very activities highlighted by 12th Street last August. (more…)