Fraud! Bonds Way Down! Candice Wins!
May 17, 2013
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Candice Wins American Idol! I was right and rightly so! Even if you didn’t watch American Idol, in fact even if you hate American Idol, watch this performance…this encapsulates her talent.
Believe it or not, even after all the issues our industry has endured, there are LOs and borrowers committing fraud. Interbank has discovered its fair share and I wanted to share a few examples:
Case 1 – Occupancy. The broker submitted the loan owner-occupied but the borrower had a rent-loss insurance policy on the subject. When we confronted her about her rent-loss insurance policy she wrote us a detailed LOE explaining she moved in and “forgot” to remove the rent-loss from her policy. We discovered this was completely untrue. The nerve.
- Case 2 – Employment. We verify employment on every file just prior to funding but when we called the borrower’s employer to verify she worked there we were given false information. In our investigation we learned from their CFO that the borrower had made arrangements with one of the other employees to falsely affirm her job. Lovely eh?
- Case 3 – Assets. The broker submitted a bank statement that was electronically altered. It was inflated by $20,000 which made the difference in getting the loan approved and funded. Unreal.
I’m sure you know any fraud discovered on a loan is reported to the authorities. Moreover, even if you had no knowledge or participation in the fraud, Interbank’s zero tolerance policy would result in termination of the relationship. I tell you this to give you some perspective…as the broker you bear a responsibility to determine the accuracy of the information you submit to the lender. Let me know if you want to discuss….
My Market Watch: Bonds are WAY DOWN this morning after the initial rate sheet was published. Interbank already issued a price worsening…I hope you got my warning earlier. THE ROLLER COASTER CONTINUES!! The simple explanation…reports came in this morning that gave traders the impression the bond market was a bad bet and to sell off bonds, take the profits from yesterday, and put their money into the stock market instead. When that happens, pricing worsens. Also, when the bond starting selling off it dropped below the Lobby and headed for the garage…this is probably the point in which Cap Markets pulled the trigger on the re-price. The bond is now trading just above the Lobby…we need it to stay above…if it falls below the Lobby it will head straight for the garage…we don’t want that…stay tuned….