Post by jeffolie on Nov 30, 2007 14:45:08 GMT -6
Phoenix Fraudsters Go Free Without Funding
No money left to prosecute fraud
By twist
Hat tip to M for this one from the Arizona Republic this morning- the Arizona Department of Financial Institutions, the mortgage regulator for the state of Arizona, has a mountain of fraud complaints, but no money to tackle them:
Arizona’s mortgage regulator has shut down a handful of Valley firms for fraud and other illegal lending practices this year, but at least 40 other investigations are stalled because there is no money to fund them.
A wave of mortgage fraud and other bad lending practices that spread across metro Phoenix led to a record number of consumer complaints against mortgage brokers, originators and lenders.
The Arizona Department of Financial Institutions has only two consumer investigators to keep up with those complaints, more than 800 of them this year. Five years ago, the state agency received fewer than a few hundred mortgage complaints a year.
To tackle the flood of complaints this year, the regulator hired independent investigators. But a plan to keep paying those contractors stalled during the last legislative session because some lawmakers said the mortgage industry should self-regulate.
Now, dozens of investigations into mortgage fraud and other bad loans are waiting until the agency’s investigators can get to them. A typical mortgage investigation takes months or more to track because of extensive paper trails and the many people involved.
"We were shorthanded to begin with, but now we have run out of money," said Felecia Rotellini, superintendent of the Department of Financial Institutions.
This is a typical "Penny-wise, pound foolish" approach from the state of Arizona. When you consider the price of the damage done by mortgage fraud- the losses to lenders, the inflated prices paid by homeowners, the blight of foreclosures in our neighborhoods, it seems to me that the price of enforcing state mortgage fraud laws is a bargain. Undoubtedly however, when the situation gets bad enough, the state legislature will pass more stringent mortgage fraud laws- then fail to fund them.
Sadly, this is business as usual in Arizona.
housingdoom.com/2007/11/30/fraudsters-go-free-in-az/#more-1107
No money left to prosecute fraud
By twist
Hat tip to M for this one from the Arizona Republic this morning- the Arizona Department of Financial Institutions, the mortgage regulator for the state of Arizona, has a mountain of fraud complaints, but no money to tackle them:
Arizona’s mortgage regulator has shut down a handful of Valley firms for fraud and other illegal lending practices this year, but at least 40 other investigations are stalled because there is no money to fund them.
A wave of mortgage fraud and other bad lending practices that spread across metro Phoenix led to a record number of consumer complaints against mortgage brokers, originators and lenders.
The Arizona Department of Financial Institutions has only two consumer investigators to keep up with those complaints, more than 800 of them this year. Five years ago, the state agency received fewer than a few hundred mortgage complaints a year.
To tackle the flood of complaints this year, the regulator hired independent investigators. But a plan to keep paying those contractors stalled during the last legislative session because some lawmakers said the mortgage industry should self-regulate.
Now, dozens of investigations into mortgage fraud and other bad loans are waiting until the agency’s investigators can get to them. A typical mortgage investigation takes months or more to track because of extensive paper trails and the many people involved.
"We were shorthanded to begin with, but now we have run out of money," said Felecia Rotellini, superintendent of the Department of Financial Institutions.
This is a typical "Penny-wise, pound foolish" approach from the state of Arizona. When you consider the price of the damage done by mortgage fraud- the losses to lenders, the inflated prices paid by homeowners, the blight of foreclosures in our neighborhoods, it seems to me that the price of enforcing state mortgage fraud laws is a bargain. Undoubtedly however, when the situation gets bad enough, the state legislature will pass more stringent mortgage fraud laws- then fail to fund them.
Sadly, this is business as usual in Arizona.
housingdoom.com/2007/11/30/fraudsters-go-free-in-az/#more-1107