One of the strongest sections of the real estate market at the moment is property with an asking price of $300,000 or less, the Naples Sun-Times reports.

As of today, there were almost 200 sales pending in this category in the Naples area alone. We don’t know for sure, but it seems a pretty safe bet that most of the buyers in this category will seek Florida mortgages.

Going to a Florida mortgage lender and asking for money is more nerve-wracking than it was to ask your parents for money for the movies on Saturday night.

You have to fill out endless paperwork and answer a ton of questions that are sometimes more embarrassing than the grilling you received when you were late returning the car.

While the mortgage broker or mortgage lender may be smiling at you and offering you a cold drink during this process, it’s the computer that ultimately approves your loan, in most cases.

A good Florida mortgage broker will have access to more than one home loan lender, so even when the computer says “no,” the broker may find someone who says “yes,” so don’t despair.

No one really wants to go through this process more than once, but the experts say you may be spending way more on a mortgage than you need to, unless you make the effort to shop around.

The amount of money that can be saved or lost on a Florida mortgage loan is at times much more than the amount between the asking price and the ultimate sale price of the property.

So, it is important to understand the mortgage process and the ultimate Florida mortgage costs - not just the monthly payments, or short term costs, but at the end, if you hold the mortgage until it reaches maturity.

Do your research. Talk to people. Get as comfortable as you can with all the terms and the concepts of buying a home. Many people do not do that. When they don’t, they can end up the victims of mortgage fraud.

Earlier this month, Florida’s Attorney General Bill McCollum waved a red flag over this issue. He said that mortgage scams were among the top 10 categories of complaints received by the Attorney General’s Office last year, particularly for Florida home equity loan transactions.

Home equity loans allow you to borrow against the equity in your home, or the difference between the value of the home and the amount you owe on it. These are second mortgages - not credit card loans. Here are some of the scams and what usually transpires:

• Equity stripping: A Florida mortgage loan provider encourages a borrower to falsify his or her loan application in order to qualify for a greater mortgage amount.
• Loan flipping: A Florida home mortgage lender repeatedly encourages a borrower to refinance their loan, which may require them to borrow more money, and as a result, accumulate higher fees.
• Bait and switch: A Florida home loan lender offers one set of terms prior to the loan application and then pressures the borrower to agree to a different set of terms after the application is actually signed.
• Deceptive loan servicing: A Florida mortgage lender does not provide the borrower with accurate or complete account statements and payoff figures.

It can seem daunting. But your first line of defense is to shop around before choosing a lender. First check to see if the mortgage lender is properly licensed and certified. You can do this at Florida’s Office of Financial Regulation.

Read all items on the contract or application carefully. Ask for detailed explanations of any dollar amount, term or condition you don’t understand. Ask if credit insurance is required as a condition of the loan. Never sign mortgage applications or contracts with blank spaces, and do not to sign if the terms are not the same as those they were given when they applied.

If you feel pressured into making a decision, take a breather before you proceed. Remember, the loan will still be there when you’re ready.

Fudging a little on that Florida home loan application may seem innocent enough: you just exaggerate income a little; boost your credit score; hide some down payment help from the mortgage lender.

After all, the borrower probably has every intention of paying the loan.

And the Florida mortgage broker who looks the other way is just helping someone realize their dream of home ownership.

But what may seem like harmless lying is fraud.

Its motive: hoodwinking banks to fund loans, so borrowers can squeeze into the homes that suit their fancy.

While mortgage fraud often takes the form of complicated criminal schemes, lying to the lender — called origination fraud because it takes place at the loan’s origin — actually is the most common.

In Florida, origination fraud is rampant.

Mortgage giant Fannie Mae reported in September that the state of Florida had the highest rates in the nation of misrepresentations on mortgage applications reviewed since August 2005.

The state recently took the lead in complaints of suspect activity filed by banks and other lenders, said the Mortgage Asset Research Institute, a national mortgage fraud data clearinghouse. According to its annual index, Florida has double the rate it should of loans containing alleged fraud and serious misinformation, given the number of mortgages originated here.

Mortgage fraud is surfacing as economic pressures force more borrowers under, leading to greater scrutiny of the loans that got them in trouble.

“We are seeing a rise in early defaults, and there is a lot of discovery about why. We’re learning that mortgage fraud has existed in a lot of those loans,” said Arthur Prieston, whose The Prieston Group provides mortgage fraud insurance to lenders.

Some experts predict the problem will only worsen in a slowing market. Mortgage brokers may be more willing to nip and tuck numbers to maintain the business they experienced during the boom.

That could result in increased foreclosures as consumers strain harder under the burdens of payments they can’t afford. But everyone could pay down the road through higher loan costs as lenders raise Florida mortgage rates and fees to compensate for losses.

Coral Gables lawyer Brian Bieber is intimately acquainted with mortgage fraud, having represented people accused of the crime. But earlier this year, he was stunned when a broker instructed his own mother, a Broward County school teacher, to create phony evidence of a second job to get a mortgage for a Hallandale Beach condo.

“That mortgage broker actually suggested to my mother that she obtain a false letter of employment from me and my law firm,” Bieber said. “The broker went so far as to give her the explicit amount my mother needed to be earning per week and asked my mother to ask me to generate at least four pay stubs.”

EVERYBODY DOES IT

In South Florida, Fannie Mae zeroed in on Pompano Beach, Miami, Hialeah and Miami Beach as particularly hot areas for fraud, based on a review of loans since 2003.

Another fraud indicator: borrowers missing payments - right off the bat. Miami-Dade County ranks second among major metropolitan areas in the number of Florida home loan defaults in the early stages, only after storm-beaten New Orleans. Lenders that autopsy loans failing within the first year typically find that as many as 25 percent contained fraud.

Mortgage industry veteran Cindy Curtis, a wholesale account executive for Wells Fargo, works with independent brokers to generate business. Among the 50 clients she has worked with this year, she had to drop business with about half a dozen for suspected misrepresentation.

“We have to be so aware of it in our daily business dealings.” Curtis said, “The majority of the people in this business are honest and hardworking, but this is an issue that affects us all so deeply. Our jobs and our livelihoods are at stake.”

A culture of indifference, a low risk of being caught, lots of foreign investment and old-fashioned greed have created a thriving arena for fraud in the South Florida housing market, experts say.

Scott Messina, a Stuart-based industry veteran who publishes a newsletter for the mortgage banking industry, said the run-up in real estate values is also largely to blame.

“What has happened is you need more of an income to qualify for a Florida home loan. So people who are on the borderline, when they apply, the broker is tempted into qualifying them for a loan they shouldn’t,” Messina said.

The temptation for fraud may worsen, some experts said, because mortgage applications nationally continue to fall with the slumping real estate market — from a high three years ago of about $4 trillion to about $2.4 trillion by the end of this year.

That means increased competition to write loans for a pool of licensed brokers that has swelled with the boom. There are 67,266 licensed Florida mortgage brokers, up from just 41,211 three years ago, according to the state’s Office of Financial Regulation.

“You had all these guys doing [refinances] because they were coming out of their ears. They got used to a lifestyle where they were making $100 to $150 grand a year,” Messina said. “Take the pie and divide it by half, and now instead of making $100,000 a year, their making $30,000. They have to make money, too, and desperate people do desperate things.”

WHO’S TO BLAME?

Law enforcement calls origination fraud “fraud for housing,” where the borrower is lying to get the Florida home loan but intends to repay it.

Fraud for housing can include inflating a borrower’s income, assets and credit score, lying about the borrower’s intention to occupy the property and falsifying employment status, as in Bieber’s mother’s case.

Sharon Dawes, the Broward area financial manager for the state’s Office of Financial Regulation, blames brokers. Consumers, she said, often are unaware of a lender’s underwriting requirements.

“It’s my experience that a Florida mortgage loan applicant is being guided by the person familiar with the mortgage process, which is the mortgage broker,” Dawes said.

But Coral Gables broker J.C. Malouf said he has often felt pressure from borrowers themselves to use misinformation to get them loans.

“I’ve lost a lot of customers because in the streets there are people who will do whatever to get you qualified the way you want,” Malouf said.

With the explosion of new kinds of home loans available on the market, Malouf said it’s possible to legally qualify just about anybody, but brokers sometimes don’t know which products to use and often sell a loan because of the commission it generates, rather than its suitability for the borrower.

For example, the widely used “stated income” loans, which require little or no salary documentation, seem to invite malfeasance by borrowers, so much so they’ve been dubbed “liar’s loans” in the industry.

For those who do get caught, the consequences can be steep.

We’re reported at length on the need for borrowers to be aware of the potential for Florida mortgage fraud. Always conduct extensive research on the professionals with whom you do business.

But this warning goes both ways.

Authorities in Seminole County are searching for two women who are apparently pretending to be interested in buying new homes to steal from real estate agents. Claiming they are interested in the currently low Florida mortgage rates, these individuals are on the loose.

Investigators said Denise Fuller and Winshenia Lamarr (pictured) and possibly a third person are meeting with real estate employees in the Central Florida housing market and then taking credit cards from their wallets.

“Police say the suspects pretended to be potential house buyers at KB Homes in Sanford,” Local 6’s Charnel Wright said. “They distracted the employees. When Realtors showed them a home, a third person went in and stole one credit card from each employee’s purse.”

Local 6 showed video of the women at a Target store in Seminole County purchasing items with stolen credit cards. Authorities were quickly able to identify the woman.

“Investigators did an excellent job at sharing the information and distributed the photographs throughout the sheriff’s office who then in turn identified the individuals who happen to be known to the agency,” Seminole County sheriff’s representative Carrie Hoeppner said.

It’s just an example of why all involving in the home owning process need to be aware of mortgage fraud possibilities. Or just basic crime.

Using stolen identities and fictitious buyers to apply for bogus Florida home loans, 11 people in South Florida ran an elaborate mortgage fraud and property flipping scheme in Broward County.

Fortunately, the Miami Herald reports, investigators have pulled the plug.

An investigation by local, state and federal agencies uncovered the ring, which conned banks into issuing around $12 million in illicit Florida home loan funds from 2002-present.

Yvette Scott Patterson, the alleged mastermind, is accused of thinking up and carrying out a scheme to submit fraudulent mortgage applications using the false data through her mortgage company, Khadmilroy Inc.

Patterson, her husband Delroy Patterson, 45, and nine other defendants have been charged with conspiracy to commit mail, wire and identity fraud. The Pattersons are currently in Jamaica, where the U.S. government is seeking their extradition. Of the nine other implicated parties, some were in jail on other charges, two were arrested Tuesday, and others are at large.

The group is believed to have profited from the sales of the fraudulently purchased property as well as more than $300,000 earned in broker’s fees through Patterson’s Florida mortgage lender. The case illustrates what so many officials have been talking about for months - the growing problem of real estate crime in Florida.

The Sunshine State ranked first in home loan-oriented fraud in a 2006 study. Fraud involving home loans is among the fastest-growing white-collar crimes in the country, particularly in areas like the South Florida housing market where the run-up in home values has been so extreme over the past five years.

In the Florida mortgage loan scam conducted by Patterson et al., the crew allegedly operated with the intention of financing a home in Sunrise. The indictment states that the defendants allegedly filled out a Florida home loan application with phony documentation and a stolen identity.

Using the same methods, the gang resold the property a year later, to a victim whose identity was also stolen, in order to get a $190,000 Florida home mortgage. Finally, in November of 2004, the defendants sold the home a third time to a victim by taking out a mortgage loan in the victim’s name for roughly $239,000.

In the surging Broward County real estate market, Patterson & Co. were able to up the value of the property by 40 percent in a little over two years. At the same time, they pocketed tens of thousands in fraudulent broker’s fees.

Some consumers in Orange County (Fla.) claim they were knowingly misled and cheated by a Florida mortgage company that offered the cheapest rates in town.
Those consumers are now turning to the state for help.

When a local TV news reporter went to confront Jeff Johnson about his company’s full page newspaper ads, Johnson said, “I’m not here to talk to you.”

His ads offered incredible Florida mortgage deals with rates as low as 1-3 percent. But consumers say to read the fine print.

“It’s past risky,” said Tom Long, who canceled his application after he says Mortgage Planning and Loan Specialists of Colorado, that has a Metrowest office here in Florida, would not offer an answer to basic questions. “(It’s) dangerous.”

An Orange County man, who wants to remain anonymous, did get a Florida home loan. He says he then was stunned by the first payment notice.

“I felt pretty foolish, and I was also pretty angry,” he said.

The company’s initial disclosure statement shows the man’s Florida mortgage loan would have an interest rate just above 3 percent, while his monthly payments would have come in around $1,400. Instead, his actual interest rate is more than 8 percent and his monthly charges approached $3,000.

The company told him and later told Action 9, its ads offer payment rates, not interest rates, so consumers actually make a partial Florida home loan payment each month. What you don’t pay is added on to your principal. It’s called negative amortization.

It’s a risky loan this consumer claims in a complaint to the state was initially hidden, then glossed over during the closing process.

“They misrepresented what they were selling,” said one consumer.

In a response to the state, Mortgage Planning and Loan Specialists wrote its ads meet all federal and state requirements, the nature of the Florida home mortgage loan was fully disclosed and no one was offered 1-3 percent interest rates.

But when an investigator called about a mortgage and met with a salesman, that’s exactly what she heard. It’s also what the TV reporter was later promised.

The reporter asked, “This 3.25 is that a real interest rate?”

The salesman answered, “To my knowledge sir, yes.”

One consumer says that tactic would cost him $60,000 in extra fees and payments.

“At some point you have to trust somebody and I made the mistake of trusting these guys,” he said.

The Florida state finance office is investigating four complaints against Mortgage Planning and Loan Specialists. The mortgage company has since offered to refinance at no charge the loan of the consumer who wanted to remain anonymous, and it says there have been only been a handful of complaints out of hundreds of Florida home loan transactions.

Given how easy it is to get ripped off on a Florida home loan, it’s almost amazing that anyone ever ends up buying a home.

But people do. A lot. Then they buy a second home. Then they refinance their primary residence. Then they do so again, or a third time, or take out a line or credit. Maybe a Florida home equity loan.

Clearly, people think this is easy. But are they getting the best deal, or are they paying more than they have to due to the tactics of shady lenders or out of their their own ignorance?

We believe the more you know about common mortgage scams, the better off you will be when negotiating and hammering out the terms of your deal. Here are some of the more common ways that lenders and brokers take advantage of their customers, and what you can do to avoid becoming the next victim of predatory lending.

NOT HONORING A RATE LOCK
When Florida home loan rates are volatile (like, say, right now), it’s a good idea to “lock in” a rate so you don’t face a higher payment if rates rise during the time it takes to the paperwork on your loan. A lock is a commitment by the mortgage lender as you fill out your application, providing you a certain rate for a specific time, often in exchange for a fee.

Here’s the kicker: A lending officer or broker may imply, or even state matter-of-factly that your rate is locked. But that and $2 will get you a large Dunkin Donuts coffee.

Get it in writing. Get it in writing. We repeat ourselves because it’s important! You’ll want it on paper if you ever end up in court. And, even if you get that written agreement, you’re not necessarily out of the woods if the lender “loses” your paperwork. If you think an unethical mortgage company wouldn’t do that to avoid honoring a commitment, you’re kidding yourself. If they delay the closing until the lock expires and you’re faced with accepting a higher rate, there’s little you can do.

How can you protect yourself?

• Use a Florida mortgage company that a friend of yours used and whose services they were pleased with.
• Do some investigating. Look up and see if a lender has complaint records with local and state regulators.
• File all the paperwork in on time. Don’t give them an excuse to stall.
• Raise a little hell if needed. If it looks like your lock is set to expire before your loan is closed, demand to speak to a supervisor. Every day, or every hour if need be. Say you’re going to complain to state regulators if your lock isn’t honored, and do so if necessary. Threatening legal action will probably make them quit playing games — after all, a lot of customers won’t kick up any fuss at all when they’re getting ripped off.

USING YOU FOR A BONUS
Let’s say you call a mortgage broker and are quoted a rate of 6.5 percent with no points on a 30-year, fixed-rate Florida home loan. And, by the time you’re ready to lock in, the lender’s rate has dropped to 6.25 percent, but the broker doesn’t tell you that, instead locking you in at 6.5 percent as originally quoted. The broker, in turn, gets a bonus of a few grand from the lender, while you get saddled with higher payments.

Amazingly, this is usually legal as long as it’s disclosed. You typically don’t find out about it until your mortgage is about to close, however, and in addition, the disclosure is usually buried deep in the paperwork. Payments from lenders to brokers for selling higher-cost loans are known as “yield spread premiums,” and are remarkably common.

How can you protect yourself?

• Know what a competitive offer looks like.
• Get all your loan quotes on the same day. A good idea anyway, as rates do change constantly, and rate-shopping over an extended period can hurt your credit score.
• Ask lots of questions. Demand to know how much the broker, if you are using one, is making from the lender as well as from fees you might be paying. It is advisable to get this information up front and on paper.

SAYING THEIR LOW RATE IS UNIQUE
If you do the grunt work, you will be able to tell when a mortgage rate is too good to be true. If a lender is offering a rate considerably below the competition, there’s going to be a catch. Hidden fees, a teaser rate that quickly expires, super-high credit standards, etc. The best way to find a straight shooter — and the best possible deals on Florida home loans — is through referrals and your own research. The same is true when refinancing.

Also, be up front about yourself if you want to get the straight facts in return. If any of the following aren’t true, you should let your lender or broker know in advance so you can an accurate quote:

1. You have a good credit score.
2. You have gainful employment.
3. You can document your income and assets.
4. You’re a U.S. citizen or permanent resident.
5. You’re planning to live in the home, not rent it out.
6. You have a down payment of decent size, as well as enough cash on hand to the cover closing costs.

SELLING YOU ON NEGATIVE AMORTIZATION
Most loans require you to pay down equity over time, so that your balance shrinks each year. But options such as interest-only loans typically don’t require principal payments for the first 5-10 years. Some adjustable-rate Florida home mortgage loans, moreover, actually allow what is known as negative amortization, where your balance grows, rather than drops.

Essentially, the low payments you are so awed by today on the $200,000 loan you just closed could mean you’ll owe $210,000 five years from now. Eek.

Any time you get an adjustable-rate mortgage, you should ask a lender for a schedule that shows how high your payments can go and how much you’ll owe after five years, after 10-15 years, and all the way up until maturity. If you have more than one repayment option, ask for a schedule for each. Don’t listen to arguments that rates “won’t” or “can’t” hit their caps or go up by more than a certain amount.

Unless your name is Ben Bernanke, nobody can predict interest rates.

BLATANT LIES REGARDING RATE CAPS
Another problem with flexible-payment ARMs is that people are getting more and more confused about caps. The typical ARM allows your interest rate to rise no more than 2 percentage points a year, or 6 percentage points over the life of the loan.

But many people with flexible-payment ARMs think they have lifetime interest-rate caps of 7.5 percent, either because they didn’t understand what they were being sold, or are deliberately misled. Be sure to get a schedule of all allowable rate fluctuations your Florida home loan is susceptible to, and to go over the fine print with a fine-toothed comb.

A NO-COST LOAN THAT ACTUALLY COSTS A LOT
Remember, if it sounds too good to be true, it probably is. Remember that every home loan has a set of costs. Appraisals, title insurance, inspection, underwriting, and so on. The lender may be tacking the fees on to the loan principal, or charging you a higher interest rate than you would have paid had you just covered the costs yourself.

You might very well want to pay a higher rate for no-cost Florida home loans if you plan to be out of the home in a year or two, and if you really understand what you’re “saving.” But if you plan to stay longer, it’s often a better idea to just suck it up and pay.

There are many factors involved in a slow housing market:

• Increased interest rates
• Overvalued markets
• The need for unique financing

Of growing concern in this particular downturn, moreover, is that diminished business will cause an influx of mortgage brokers to look the other way when generating leads and underwriting Florida home loans.

“Brokers have more financial incentive not to examine deeply all of the applicants and deal characteristics that they probably should,” says Mark Clifford, chief information officer of GE Home Finance.

This relaxed, laissez faire attitude could reverberate up the funding chain to financial institutions and then out into the secondary market where Florida home loans are purchased by investors.

That’s where, Clifford notes, “any claim that the loan source (broker) is solely culpable will not hold up under legal scrutiny. The argument that the lender did not gather information directly from the customer and thus shouldn’t have any liability in the transaction is viewed with increased skepticism by the courts,” he reports.

A case in point is the recently suspended, new ordinance in Montgomery County, Md., which would hold liable investors and buyers of a mortgage loan on the secondary market and be subjected to substantial monetary fines for violations of the law’s anti-discriminatory requirements.

The Mortgage Bankers Association argues that “as a result of this potential substantial monetary liability for violations, lenders, investors and buyers would have a great reluctance to make, sell or buy loans made in Montgomery County.”

Mix of challenges within the home loan world

As if the natural arc of business expansion and contraction were not challenge enough, loan originators also have to labor in a market overshadowed by the federal Do-Not-Call law, enacted three years ago and now blanketing more than 40 percent of all U.S. households. It is significantly limiting brokers’ previously unfettered telephone access to prospective borrowers.

Regulatory and legal issues aside, it is economic issues – notably tighter margins – that fuel the diligence problem, according to Chris Stimac, credit risk manager, Oak Street Mortgage.

“It is only natural,” he holds, “that with shrinking profits, there is less incentive to drill down in those mortgage applications and fewer personnel to do it.

“Obviously you’re not going to pay more people to take longer to look at loans,” says Stimac, who suggests brokers and loan officers ought to turn to technology for the heavy lifting.

This is especially important for the small- to mid-size originator who could be hurt by a slew of buybacks, or literally put out of business by serious litigation like a class-action lawsuit.

One mortgage company executive, who preferred not to be named, says he believes better data and more reliance on technological protections would enable lenders to take a more proactive stance on due diligence and fraud problems that might ensue. He claims today’s originators do not have the same level of expertise they had 20 years ago and that could silently contribute to more fraud.

The lesson, as always, is to be careful with your Florida home loan. Use the Wen to conduct your own research instead of putting all of your trust in a broker.

A pair of prosposed bills in Congress could have a major impact on the housing market. Those looking for Florida home loan information should take note.

In the Senate, legislation by Barack Obama (D-Ill), with Dick Durbin (D-Ill) and Robert Menendez (D-NJ), calls for a comprehensive set of reforms to combat mortgage fraud. Meanwhile, in the House, a measure offered by Reps. Steve Chabot (R-Ohio) and Bart Gordon (D-Tenn.) would strengthen property rights protections afforded owners under the Fifth Amendment.

Protecting buyers and owners from home loan fraud

The Senate bill, entitled “Stopping Transactions which Operate to Promote Fraud, Risk and Underdevelopment Act” would boost funding for federal enforcement, create new criminal penalties for fraudulent activities in mortgage lending and brokering, establish reporting requirements and increase funding for counseling individuals that are enticied by supposedly helpful home loans.

The bill also would establish a national database to act as a clearinghouse of information about mortgage professionals who have been disciplined by state or federal regulators.

Several provisions in the measure embrace actions long advocated by the lending community. For example, they have practically pleaded with the Department of Housing and Urban Development, which would get $10 million under the measure, to develop anti-fraud programs and step up its enforcement efforts.

It also would require the FBI to update lenders about fraudulent activity and individual criminals in an orderly fashion through the national data base. Currently, information is passed along on an irregular basis via industry websites that post whatever data they can find.

But the bill would also require loan officers to report suspicious activity, a step that, for the most part, they have been loathe to take. However, the bill does grant whistle-blowers immunity from liability, so Florida home loan lenders are more likely to embrace the requirement.

Dealing with property rights

In the House, meanwhile, the bill by Reps. Chabot and Gordon, “The Property Rights Implementation Act,” would ensure that property owners get their day in federal court if they object to losing their homes or land under the doctrine of eminent domain. Significantly, the bill is cosponsored by House Judiciary Committee Chairman Jim Sensenbrenner (R-Wis.).

The Fifth Amendment provides that no person shall “be deprived of life, liberty or property without due process of law; nor shall private property be taken for public use without just compensation.” Under the current system, however, owners must exhaust their legal rights in state courts before they can appeal to Uncle Sam.

That presents owners with a so-called “takings claim” with an “untenable paradox,” says David Pressly, a home builder from Statesville, N.C., and the president of the National Association of Home Builders, because bringing the case to state court and having a takings claim heard - even under state law - often precludes the property owner from review by the federal courts.

“A property owner is, in effect, blocked from using the federal courts to enforce the Fifth Amendment’s just compensation guarantee,” Pressly explains. “As a result, property owners throw up their hands and give up without ever getting a fair hearing in federal court.”

The housing industy leader continued:

“This bill would finally put the Fifth Amendment back on par with the rest of the Bill of Rights. Congress has passed laws to ensure that citizens alleging a violation of their constitutionally protected rights have access to federal courts. Fifth Amendment takings cases should be treated no differently.”

These bills would help ease concerns of those unsure about entering into an agreement on a Florida home loan.

As mortgage fraud remains a serious problem for communities across the country, the Appraisal Institute, the American Society of Appraisers (ASA) and the American Society of Farm Managers and Rural Appraisers (ASFMRA) continue to voice their support for congressional action to abate mortgage fraud, particularly The Responsible Lending Act (H.R. 1295).

In a joint letter to Michael G. Oxley (R-OH) and Barney Frank (D-MA), chairman and ranking member, respectively, of the House Financial Services Committee, the appraisal organizations urged the Congressmen to address the issue of mortgage fraud and enact reforms that are provided for in H.R. 1295.

“This legislation provides flexible solutions to real world problems in the mortgage market,” said Richard D. Powers, MAI, SRA, President of the Appraisal Institute. “Mortgage fraud is reaching epidemic proportions, but there is still time for Congress to address this effectively.”

H.R. 1295, pending before the Financial Services Committee, seeks to establish new standards to accomplish the following aims:

• Curb predatory lending practices
• Register mortgage brokers
• Abate appraiser intimidation
• Improve accountability and enforcement practices of federal and state appraiser regulators.

“Most mortgage brokers remain unlicensed, despite there being industry support to do so,” said Powers. “Federal and state appraiser regulators also face funding and enforcement challenges - both of these issues are addressed proactively by H.R. 1295.”

Those seeking a Florida home loan need to be aware of such scams. Conduct proper research into the Florida mortgage broker with whom you’re aligned.