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This is my effort brief overview of one of the most complex industries in the engine powers world commerce and makes nations slaves. Here finance industry can have its most devastating effect on an years to come. This industry can enslave us all. to give the consumer a world. The finance in America, the individuals� life for
In 2000, the Fannie Mae Foundation developed a program to train more minorities for the mortgage finance industry and better inform minority consumers on home ownership. They funded only three such programs in the nation. One of which was at Miami-Dade Community College at the Wolfson Campus. It offered a college credit certificate in Mortgage Finance, of which I am a proud graduate. Everyone uses credit and few, if anyone, understands it. Nevertheless, how can we understand it when there is a shroud of secrecy in the methodology of the credit scoring system? The system compounded with fraud by the industry itself, which leaves the consumer very little protection by law. It is my opinion that fraud in the financial industry is having a catastrophic effect in all industries. You may have heard about Enron and WorldCom, which devastated individuals� life savings and rocked the accounting world. Predatory lending now threatens the American Dream! Today, when I open my e-mail there it was sending a horrifying chill down my spine. �Even with bad credit, get the financial help you need.� Everywhere you look, they are there, �Good credit bad credit, we finance�. It reminds me of Michael Jackson�s 1984 �THRILLER� video, with the voice of Vincent Price and his evil laugh, �hah, hah, hah, hah�� We are going to get you. What is this paradoxical term �Even with bad credit�? For the purposes of this paper, credit is defined as trust in one�s ability to meet payments when due under the terms and conditions of a financial agreement. Debt simply means owing money. In addition, fraud, no lying, that is a better definition. The primary fraud that is of concern today is personal identification theft (ID fraud). However, the greater concern for Americans should be the fraud perpetrated by the mortgage industry. Major banks such as, Chase Manhattan, are underwriting predatory lending practices through subsidiaries or lesser-known loan-servicing companies, like Select Portfolio Servicing, Inc., formally known as, Fairbanks Capital Corp.; this allows Chase Manhattan to shield their corporate image from the stigma predatory lending. However, Chase Manhattan, later appear as plaintiffs in foreclosure hearings. It is a mortgage shell game used by common street con artist. One of the first noticeable signs of trouble for the consumer is the selling of your mortgage from one company to another. This is an industry practice; however, after two or three time it should raise some concern, and gives new meaning to the real estate term �Flip This House.�
There is not much you can do to stop the selling of your mortgage. Your best defense is to keep good records of all notices concerning the sell your mortgage. By law, you must receive written notification of the sell. Another sign of predatory lending is mortgage insurance. This is a life insurance policy the lender is peddling that will payoff the mortgage in the event of your untimely demise, in and of itself, the insurance is not a problem. However, it becomes a problem when the lender forces it upon you, because it will raise your mortgage payment Be on the lookout for forced placed homeowners insurance, as well, which is a considerably higher than consumer pays. Remember, �Under the terms and conditions of a financial agreement�. Well, one of the conditions is you agreed to have continuous homeowner�s insurance coverage. Fairbanks was covering homeowner with forced placed insurance, while the homeowners had insurance coverage under the agreement. In the case of Fairbanks Capital Corp., also known as, Select Portfolio Servicing, Inc., they were holding mortgage payments posting them as late, thereby, reporting fraudulent information to the three major credit bureaus. Fairbanks Capital Corp., rushed into courthouses all over the country filing fraudulent foreclosures cases; thousands lost their homes, and, as many, were forced into bankruptcy. (See: FTC vs. Fairbanks Capital Corp.) In most good quality mortgages, the mortgage payment covers the principle and interest, taxes, as well as, the homeowners� insurance premium. If the loan originator is a predator they misrepresent clients incomes, etc., in order to get the potential new homeowner in their dream home, the payment will only cover the amount of principle and interest. Before I go on, this is the proverbial stake through the heart, causing your homeownership demise. Your credit score is the greatest factor concerning the interest rate you pay, unless you are African American or Hispanic. (Look Smart Find Articles Black Enterprise Get the loan you deserve: Tanisha A. Sykes, COPYRIGHT 2005 Earl G. Graves Publishing Co., Inc.) The high interest rate is why the payments are only principle and interest, and should included taxes and insurance. In addition, if there is pressure to purchase the life insurance, which is added to the monthly loan payment. After signing this mortgage, you are going to need the life insurance. The shock that you cannot afford the mortgage, because of taxes and insurance payments. God forbid, your mortgage has an adjustable interest rate, or a balloon payment. In addition, let us not forget the prepayment penalty. You maybe a victim of Mortgage fraud. �We finance everybody!� Danny Couch � 2007 DceLtd. Bibliography: LookSmart Find Articles > Black Enterprise > July, 2005 http://findarticles.com/particles/mi_m1365/is_12_35/ai_n15652756/print
Federal Trade Commission Fairbanks Capital Settles FTC and HUD Charges http://www.ftc.gov/opa/2003/11/fairbanks.shtm Mortgage Fraud News - Florida Home Loan Archive for the �Mortgage Fraud� Category http://www.floridahomeloan.com/tags/mortgage-fraud/ Miami Herald.com Sunday, July 1, 2007 THE MORTGAGE TRAP BY MONICA HATCHER mhatcher@MiamiHerald.com