Author Topic: Mortgage fraud on the rise - people lie about income to qualify  (Read 68 times)

ergophobe

  • Inner Core
  • Hero Member
  • *
  • Posts: 4259
    • View Profile
Mortgage fraud on the rise - people lie about income to qualify
« on: October 10, 2018, 03:39:04 AM »
I thought this was harder since 2008. But I guess harder is not the same as impossible

https://www.cnbc.com/2018/10/03/mortgage-fraud-is-getting-worse-as-more-people-lie-about-their-income.html

When I got my home loan in 2006, only a fool would have lent to me. I was confident that I could repay it, but we had been at best semi-employed for a while. Lucky for me, back then if you had a pulse and you paid off your credit cards, they'd give you a million dollars.

Mackin USA

  • Inner Core
  • Hero Member
  • *
  • Posts: 2224
  • Abstract Artist
    • View Profile
Re: Mortgage fraud on the rise - people lie about income to qualify
« Reply #1 on: October 10, 2018, 11:03:37 AM »
About 2007 we applied for a home improvement loan from Washington Mutual

It appeared to us that they didn't give a crap about income.

https://www.federalreserve.gov/data/mortoutstand/current.htm

Mr. Mackin

aaron

  • Inner Core
  • Full Member
  • *
  • Posts: 194
    • View Profile
Re: Mortgage fraud on the rise - people lie about income to qualify
« Reply #2 on: October 11, 2018, 10:02:15 PM »
I think a lot of the regulations were applied to the big-get-bigger banks & so those really huge banks started to invest in / fund credit flows to alternative lenders as a way of more easily passing their stress tests and navigating the tighter regulatory environment.
https://www.washingtonpost.com/realestate/the-mortgage-market-is-now-dominated-by-nonbank-lenders/2017/02/22/9c6bf5fc-d1f5-11e6-a783-cd3fa950f2fd_story.html
Quote
In 2011, 50 percent of all new mortgage money was loaned by the three biggest banks in the United States: JPMorgan Chase, Bank of America and Wells Fargo. But by September 2016, the share of loans by these three big banks dropped to 21 percent. At the same time, six of the top 10 largest lenders by volume were non-banks, such as Quicken Loans, loanDepot and PHH Mortgage, compared with just two of the top 10 in 2011.

“Now banks only approve ‘perfect’ loans, not ‘good-enough’ loans,” Taylor says. “This created an opportunity for non-banks that focus entirely on mortgages and are less regulated than big banks.”

https://www.wsj.com/articles/the-new-mortgage-kings-theyre-not-banks-1536242400
Quote
Their capital levels aren’t as heavily regulated as banks, and they don’t have deposits or other substantive business lines. Instead they usually take short-term loans from banks to fund their lending. If the housing market sours, banks could cut off their funding—which doomed some nonbanks in the last crisis. In that scenario, first-time buyers or borrowers with little savings would be the first to get locked out of the mortgage market.