Astounding:
Orson Benn, once a vice president at the nation’s largest subprime lender, spent three years during the height of the housing boom tutoring Florida mortgage brokers in the art of fraud.
From his office in New York, he taught them how to doctor credit reports, coached them to inflate income on loan applications, and helped them invent phantom jobs for borrowers.
While prosecutors looked at roughly $100 million in loans written by Benn and a cadre of co-workers, that represents just a portion of the loans they approved during his aggressive expansion into Florida.
The Miami Herald found that Benn’s network approved more than $550 million in home loans from Tampa to West Palm Beach to Miami, according to an analysis of court records. In Miami-Dade County alone, Benn’s office approved more than $349 million in loans on 1,913 homes — more than one in three have since fallen into foreclosure, the analysis shows.
Valdes brokered at least 100 of those loans worth $22 million — nearly all based on false and misleading financial information, the newspaper found
How did they doctor loan apps? Simple mortgage broker fraud: “non-existent employers, grossly inflated salaries and sudden, drastic increases in the borrower’s net worth.”
There apparently was an art to falsifying the documentation, and Benn taught his brokers precisely how, falsifying income and employment data:
He taught one of those brokers, Scott Almeida, a convicted cocaine trafficker, to prepare phony income statements and doctor credit reports. A few months later, Almeida introduced Benn to Tampa brokers David Tuggle and Eric Steinhauser. After Benn taught them to prepare phony documents, they began to write millions of dollars in loans.
The accompanying video is a must see, and the entire article definitely worth reading.
Nothing on predatory borrowers, though . . .
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Previously:
Laughable: “Tyler Cowen: Predatory Borrowing The Bigger Problem” (January 2008)
http://www.ritholtz.com/blog/2008/01/tyler-cowen-predatory-borrowing-the-bigger-problem/
Source:
Exec had mortgage racket down to an art
JACK DOLAN, MATTHEW HAGGMAN AND ROB BARRY
The Miami Herald, 12.06.08
http://www.miamiherald.com/457/story/802703.html
See also:
Legacy of tainted home loans: vacancy, vandalism, foreclosure
ROB BARRY, JACK DOLAN AND MATTHEW HAGGMAN
The Miami Herald, 12.06.08
http://www.miamiherald.com/news/florida/story/802698.html
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