Lenders victimized in real estate fraud
October 7, 2004
Mortgage bankers urge stronger enforcement, communication
The Mortgage Bankers Association today testified before the House Financial Services Subcommittee on Housing and Community Opportunity, urging stronger enforcement, better communication between law enforcement and the industry, and increased innovation to identify and prosecute those who commit fraud against mortgage lenders.
"Today, mortgage industry leaders are extremely concerned that mortgage fraud against the lending community has grown quite large in the past several years with devastating consequences to lenders and, depending on how the fraud is perpetrated, to taxpayers, consumers and communities," stated Marta McCall, senior vice president for risk management at American Mortgage Network Incorporated, in her testimony on behalf of MBA.
Mortgage bankers play a central role as risk intermediaries, allowing funds to flow from the capital markets to consumers. Lenders underwrite the loans, and then extend credit on terms and conditions commensurate with the level of risk involved. In this capacity, mortgage bankers bear nearly all the risk of mortgage fraud.
MBA said there is no substitute for strong law enforcement that aggressively prosecutes those who commit mortgage fraud and sends a clear message to those who contemplate it, according to a press statement. MBA has also begun working closely with the FBI to discuss tools that could be developed that would enhance communication, such as regular reports from law enforcement to the industry summarizing the types and locations of reported frauds they are receiving. The home loan industry needs the help of policymakers in creating safe harbors for information sharing, and other tools that would allow better tracking of those who commit mortgage fraud, MBA said.
Washington, D.C.-based Mortgage Bankers Association is a national association representing the real estate finance industry.
Copyright 2004 Inman News
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