Boiler Rooms, Foreclosure Mills: The Story of America's Mortgage Industry

[Better Believe It]

Boiler Rooms, Foreclosure Mills: The Story of America's Mortgage Industry
Written by Michael Hudson
Michael Hudson is a staff writer with the Center for Public Integrity, a nonprofit journalism organization.
October 10, 2010

The news about the nation’s foreclosure scandal has been coming fast and furious, driven by tales of backdated documents, false affidavits and “rocket dockets” that push families into the street. A former employee with one of the nation’s largest lenders testifies that he signed off on 400 foreclosure documents a day without reading them or verifying the information in them was correct.

Ex-employees of a law firm that serves as a “foreclosure mill” for major lenders describe a workplace where speed — not accuracy or justice — trumps all. “Somebody would get a 76-day foreclosure,” one recalled, “and then someone else would say, ‘Oh, I can beat that!’”

Shocking stuff. But surprising? Not for anyone who’s been tracking the recent history of the mortgage machine. Just about every corner of the America’s mortgage industry has been blemished by significant levels of fraud over the past decade.

On the front end of the process, for example, many mortgage pros used “boiler room” salesmanship to peddle loans to borrowers who didn’t understand what they were getting and couldn’t afford their loans in the long run. To make these deals go through, some workers forged borrowers’ signatures on key documents, pressured real estate appraisers to inflate home values, and created fake W-2 tax forms that exaggerated loan applicants’ earnings.

At Ameriquest Mortgage, one of the companies I focus on in my new book about the subprime mortgage debacle, The Monster, this sort of cut-and-paste document production was so common employees joked that the work was being done in “The Lab” or the “Art Department.”

Please read the full article at:

http://www.eurasiareview.com/201010108958/boiler-rooms-foreclosure-mills-the-story-of-americas-mortgage-industry.html

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