| Mortgage fraud may continue to plague the real estate | | | | negligent misrepresentation of this information |
| industry. Maybe, I am seeing only the 20% Fraud for | | | | contained in this application may result in civil liability, |
| Property/Housing, as defined by The Federal Bureau | | | | including monetary damages, to any person who may |
| of Investigations.Reasons why mortgage fraud may | | | | suffer any loss due to reliance upon any |
| continue:1) The escalating cost of housing and the | | | | misrepresentation that I have made on this application, |
| "American Dream" of owning your own home.2) | | | | and/or in criminal penalties including, but not limited to, |
| Licensing for real estate agents and mortgage brokers | | | | fine or imprisonment or both under the provisions of |
| is much too easy. The requirements for licensing need | | | | Title 18, United States Code, Sec. 1001, et seq.;...7) the |
| to require a greater level of education, more than a | | | | Lender and its agents, brokers, insurers, servicers, |
| high school degree as a prerequisite for licensing and | | | | successors and assigns may continuously rely on the |
| harder licensing requirements, such as more | | | | information contained in the application, and I am |
| pre-licensing education and harder tests. This will result | | | | obligated to amend and/or supplement the information |
| in better people and less people entering the real | | | | provided in this application if any of the material facts |
| estate profession.3) Lenders need to offer less loan | | | | that I have represented herein should change prior to |
| programs, for example, stated income loans (some | | | | closing of the Loan;..."7) Enforcement of the |
| refer to this as inflated income loans) and no doc (no | | | | paragraphs from the typical mortgage, which |
| documentation loans).4) Most lenders require an IRS | | | | reference the borrower's loan application and |
| (Internal Revenue Service) Form 4506 at time of | | | | acceleration clauses: Borrower's Loan Application. |
| closing. Now, there is something that an underwriter or | | | | Borrower shall be in default if, during the Loan |
| lender can request information and stop an inflated | | | | application process, Borrower or any persons or |
| (aka stated) income mortgage application dead in its | | | | entities acting at the direction of the Borrower or with |
| tracks. If they lie on their income tax return, is it possible | | | | Borrower's knowledge or consent gave materially |
| that they would lie on their mortgage application?5) | | | | false, misleading, or inaccurate information or |
| Lack of educational programs in the real estate | | | | statements to the Lender (or failed to provide Lender |
| profession to identify mortgage fraud - could be | | | | with material information) in connection with the Loan. |
| wishful thinking, due to the Privacy Act - but at least a | | | | Material representations include, but are not limited to, |
| start. Where to report suspected mortgage fraud | | | | representations concerning Borrower's occupancy of |
| situations to the appropriate law enforcement | | | | the Property as Borrower's principal residence. |
| authorities.6) The credit reporting and scoring system | | | | Acceleration; Remedies. Lender shall give notice to |
| needs an overhaul. Too often, I find errors on credit | | | | Borrower prior to acceleration following Borrower's |
| reports, where the creditor is not reporting timely or | | | | breach of any covenant or agreement in this Security |
| accurately information. For example, a customer | | | | Instrument...(d) that failure to cure the default on or |
| settled in full his collection action in the later part of | | | | before the date specified in the notice may result in |
| February '06. The collection agency in the later part of | | | | acceleration of the sums secured by this Security |
| April is still showing a portion of the account as | | | | Instrument, foreclosure by judicial proceeding and sale |
| outstanding with a current date. Yes, they reported the | | | | of the Property.8) Better and possibly required |
| payment, but did not remove the negotiated portion of | | | | education of prospective borrowers, so they can |
| the balance.7) Lack of control points within the existing | | | | recognize the impact and identify |
| system.What could possibly be done to reduce the | | | | situations.Implementation of number 6 above will send |
| mortgage fraud:1) More checks and balances within | | | | shock waves into the communities and cause the less |
| the system to identify potential mortgage fraud | | | | desirable professionals out of business and awareness |
| situations.2) More education for all real estate | | | | to borrowers. Many may argue that this will be costly |
| professionals - real estate agents, REALTORS, | | | | to the overall economy or lenders if foreclosure |
| underwriters, lenders, etc.3) Greater licensing | | | | proceedings are needed, but in the long run there could |
| requirements for all. And licensing requirements where | | | | considerable savings for all.In summary, mortgage |
| no licensing is required at this time.4) Implementation of | | | | fraud may continue, until such time that the losses |
| a "whistle blower" protection system and telephone | | | | reach greater levels unless there is a proactive |
| hotline.5) Proactive preventative action on the part of | | | | preventative overall program to curb it. Old country |
| lenders.6) Enforcement of Section IX - | | | | saying "you don't close the gate after the horse leaves |
| "ACKNOWLEDGEMENT AND AGREEMENT" | | | | the corral."(c) Copyright 2006, Glenn M. Ginsburg. All |
| located on page 3 of the Uniform Residential Loan | | | | rights reserved.Glenn Ginsburg is a Florida Licensed |
| Application (FNMA 1003): | | | | Real Estate Broker and Mortgage Broker in the Naples |
| "Each of the undersigned specifically represents to | | | | real estate market for over 10 years. Also serving the |
| Lender and to Lender's actual or potential agents, | | | | Bonita Springs real estate and Estero real estate |
| brokers, processors, attorneys, insurers, servicers, | | | | markets in southwest Florida. Glenn was selected as a |
| successors and assigns and agrees and | | | | 2006 FIVE STAR Real Estate Agent "Best in Client |
| acknowledges that: (1) the information provided in this | | | | Satisfaction" from over 12,000 real estate agents in |
| application is true and correct as of the date set forth | | | | southwest Florida. He is the owner/broker of A Delta |
| opposite my signature and that any intentional or | | | | Realty of Naples Florida. |