Forensic Securitization Mortgage Loan Auditor

I've modified my new job title (above), it more accurately reflects what I am doing these days. What I've observed so far, is that Lenders & Servicers and their transfer/assignments are frequently faulty. A lot of them, are knee-deep with Robo-Signing activities. In most cases they and not the Borrowers are the result of a negative determination by me. Frequently I see them going all the way thru Foreclosure and right down to scheduling a Trustee Sale date - next step is taking the property in as an REO - when they didn't even 'have standing to foreclose' in the first place! You might ask, who would be so stupid? Think about the names of the handful of top Lenders in America. Now with their names fresh in your brain, I'll give you a clue! --> ALL OF THEM (that's who).

Now., please don't get me wrong, I see plenty of Borrower actions that I deeply question as well. Both at origination and later throughout the process. And, in some cases ... I simply tell them 'mail in your house keys'

What's a Forensic Auditor?

I have accepted a new fascinating assignment for xxxxxxx Associates - Mortgage Experts, as a Forensic Auditor. They give me a Borrower's file as it was compiled by their marketing division and/or the Borrower's attorney, and it's my job to review it from GFE/origination onward to the Secondary Market and into a Securitization if appropriate and through the Servicing activity an any subsequent Foreclosure, REO action.

With the info they provide me, plus independent research I do, along with my long experience in most phases of the industry, I am to analyze if everything was handled properly and lawfully: ie origination fraud and other potential mistakes (RESPA, TIL violations etc by the Lender or Broker) violations of the Fair Debt Collections Act and other servicing mishandling activities, ROBO signing, unlawful assignments from one loan owner to the next, forged notary signatures ... each file so far has taken me approximately 10 hours to complete.

I have completed eight files to date and am absolutely stunned beyond words (or what I like to say that describes that feeling - 'shit-shocked') at what I have seen! It is 100 times worse than we read in industry publications and/or the evening news on television! It goes far beyond merely being sloppy, in just these handful of files I have seen activities by quite a few of the major players in the industry that seem to me to boarder on criminal liability. I am embarrassed for how these industry giants treat borrowers.

Welcome to 2012

Just got finished watching the Rose Parade, while sitting there my thoughts wondered to what I should say today. All things considered I think the theme for this year should be GIRD YOUR LOINS.

Have a Happy and Prosperous New Year.

Haven't had a bunch to say lately; a week ago today at midnight, I fell down the stairs in my home - landed with such a THUD it woke up one of the neighbors! 911, paramedics, ambulance, ER and I got to spend 4 days in the hospital! Hope your Christmas was better than that.

Started a new consulting assignment as a Forensic Auditor reviewing case files on Robo signing, improper/illegal foreclosures by organizations who actually recorded ownership documents transferring their "Rights, title and interest in and to the Note and Deed of Trust" of this borrower or that one when they had No Standing to do so! I am so surprised, I mean so stunned by what I see I'm shit-shocked.

Forget about what you and I have seen in CBS, NBC and ABC's Evening news - it's worse!!

Start Your Own Mortgage Company

The real estate market is beginning to settle down; at this point in the cycle people begin to think about opening their own mortgage operation. One key step is the proper hiring of Loan Officers (LO). Mainly since the Fall of 1998 when the Russian Ruble collapsed and there was an industry collapse, in it's wake LO's were taken on board by most as 100% commissioned sales people. Please don't make that mistake!

When you do that sort of thing, you end up with people who come to your company with LOTS of baggage from their former employer(s). Ethical issues that can kill your fledgling operation. For the 8+ decades before that (like when I started in the business), we were paid salary and a modest bonus when me met certain broad ranging goals.It's best to hire LOs that have NO mortgage or real estate experience, that way they get infected with your firm's ethics and integrity instead of being high paid commissioned salespeople who tend to be greed driven.

The central theme (the #1 reason) on why any customer will do business with your company is it's credibility in the community. You think this guy's got that?

SEC FINALLY Charges Former GSE Execs with Securities Fraud

"Six former executives at Fannie Mae and Freddie Mac are now facing securities fraud charges (that means JAIL)  for making misleading statements about the companies' holdings of subprime loans between March 2007 and August 2008. The Securities and Exchange Commission (SEC) alleges they fed the markets false information about the amount of risk on each company's books. Both GSEs entered into non-prosecution agreements (means prosecutor's WEAK) with the SEC and have agreed to cooperate in the litigation against their former executives ... in which each company agreed to accept responsibility for its conduct and not dispute, contest, or contradict the contents of an agreed-upon Statement of Facts without admitting any wrongdoing."

Ya know, it's stuff like this that makes my blood boil - years later they finally are about to be brought to justice, and the 'big-boys' always they get off. Now, don't get me wrong ... I'm not one of those 'occupado' 99%er people, but like you, I too am sick & tired of the major lack of aggressive enforcement of the laws we all see everyday.

I got a real kick reading the language they used in this article to try and sound not-guilty, some quoting of these exec statements: (no subprime, we only had...) “basically no subprime exposure,” subprime like” "expanded approval” "Alt-A loans" when actually Freddie Mac had $244Billion and almost 20% of Fannie Mae's portfolio was full of them! This isn't an inditment of the loan types, it's all about the FRAUD.

Rebuilding our Industry - Part 3

As we look forward to an uncertain new year, let me paraphrase the following from a news piece I saw this morning " ... in 1997 there was no Google. In 2002 there was no Facebook. There was no Twitter in 2004, and the iPad only made its debut in 2009. There is no indication that the pace of innovation will slow, so how can you plan for the future when the target is moving, and moving quickly?"You must get your head outta a sales/production mindset.

I think the word/concept for the year will be COMPLIANCE.

As a small/medium owner/operator of a mortgage brokerage or mortgage bank - few operators paid a whole lot of attention to this area, yet today there's 2+ dozen news laws and regulations that have been heaped on you just since this mess started a couple of years ago. Many of them still not fully written or even implemented yet ... and more to come!

Start paying close attention to industry news publications, read several of them on a regular basis so you can keep up with what's happening (among others - I have read the National Mortgage News - the dead-tree paper edition arrives at my home on Monday - weekly since 1982). 2012 and beyond to be owned by those that are picky on Compliance issues.