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Beware, the Soft Fraud Epidemic is Coming!

By Anthony N. Romano III, National Mortgage News Online > Compliance and Fraud

March 19, 2007

 

For decades, the U.S. mortgage market was dominated by fixed-interest rate mortgages. However, during the last five years there has been rapid expansion of “private label” mortgages as Wall Street firms and other institutions (REITS, Hedge Funds, etc.) began securitizing mortgages. From 2003 to 2005 the share of private label mortgages increased from 13 percent to 29 percent, two-thirds of which are non-prime loans!

 

Wednesday, March 7, 2007

Grand jury indicts Plano man with mail fraud and making false statements in used car sales

By Pegasus News wire

 

A federal grand jury in Dallas indicted Massoud Mortazavi-Koupai of Plano with six counts of mail fraud and three counts of making a false statement on transfer of a used motor vehicle, related to a fraudulent scheme which included concealing structural damage and odometer discrepancies. It is anticipated that Mortazavi-Koupai, 46, will surrender to federal authorities and then appear before a U.S. magistrate judge.

 

Non-traditional mortgage loans include adjustable-rate mortgages, piggyback seconds, option ARMs -today 70 percent of option ARMs pay the minimum, usually interest only - and interest only loans. These creative loan products have propelled the mortgage market to feverish heights and allowed many Americans to become homebuyers who otherwise would not qualify for home ownership. That’s the good news.

Now, here is the bad news.

A macro-economic look at the situation and its impact on mortgage lending reveals that home appreciation is flat, interest rates are rising, income growth is slow, home equity is monetized, consumer credit card debt is increasing…and there is a resetting of trillions of dollars in Adjustable-Rate Mortgages.

... Full Story