When mortgage professionals do 'anything' to get deals done, they can face severe penalties

Jerome Mayne, founder and president, Fraudcon Inc.

As published in Scotsman Guide's Residential Edition, August 2006.

About the Author:

"In 1999, I began serving a 21-month federal-prison sentence after being convicted of conspiracy to commit mail and wire fraud. The crime involved four real estate investors who submitted fraudulent documentation to get approved for home loans. I was their loan officer.

"After the first few transactions, I knew that some of the documents I accepted were fake. But with the pressure to get the deals done, I relented.

"Additionally, over a nine-month period, I accepted money for 'looking the other way.'

"Some have said that my crime was 'fraud light.' Some said that I was in the wrong place at the wrong time.

"Well, there is no such thing as fraud light. I committed a crime.

"There was only one thing worse than saying goodbye to my two young boys before I left for prison. It was watching them walk out of the visiting room when visiting hours were over."

-- Jerome Mayne

A man walks into a bar. He says to the bartender, "I've got a meeting with a guy who had a foreclosure about a month ago, has been out of work for three years and is flat broke."

The bartender says, "Yeah, that's him right there -- passed out, at the end of the bar. Are you some kind of bill collector?"

The man says, "No. I'm his loan officer. When he comes to, tell him his loan's been approved."

If you got a chuckle out of this, you know it's based in truth. If you didn't chuckle, you're probably not in the real estate finance business.

The FBI reports that fraud is large and growing. Even if the bureau wasn't telling us that mortgage-fraud-related indictments and convictions are increasing, just about everybody in this industry knows that fraud is a huge problem. Still, it seems that awareness of it isn't helping much.

So, why is mortgage fraud increasing at such a rapid pace? The answer may lie in pressure to get things done.

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