Ohio Department of Commerce

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Ohio Department of Commerce Division of Financial
Institutions 77 South High Street 21st
Floor Columbus, OH 43215-6120 [phone] FAX
[phone] www.com.state.oh.us
Ted Strickland Govenor Kimberly A. Zurz Director
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Division of Financial InstitutionsConsumer
Finance Depository
Institutions

• Check Cashers
• Credit Services Organizations
• Mortgage Brokers/loan officers
• Pawnbrokers
• Premium Finance Cos
• 2nd Mortgage Cos
• Short Term loans
• Small Loan Cos

• Banks
• Credit Unions
• Money Transmitters
• Savings Banks
• Savings and Loans

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2 Investigators at your service
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A Mortgage Broker

• A person who holds himself as being able to
  assist a buyer in obtaining a mortgage and
  charges or receives money from either the buyer
  or lender or any other valuable consideration.

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Mortgage Broker ..

• A person that solicits financial and mortgage
  information from the public, provides all
  information to a mortgage broker and charges

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Documents Required

• 3 files need to be examined
• The lender file (bank)
• The title file
• The broker file AND victim/buyer file

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Must Haves

• Mortgage Loan Application
• Purchase Agreement
• Verifications deposit, rent or mortgage
• Title Company disbursement ledger
• Rental/lease agreements
• Source of down payment-checks
• Copies of bank statements-title co, 3rd party,
  in/out
• Wire transfer documents

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Must haves cont

• HUD 1- borrowers, sellers
• 2nd mortgage if applicable
• Associated companies

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Review of current fraud trends

• Straw buyer Scheme.
• Builder bailout scheme
• Flips
• Latest
• Short sale scams
• Foreclosure rescue schemes

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Short sale

• Buyer purchases homedoesnt make a payment
• Few months buyer tells lender house will
  foreclose
• Buyer presents other buyer who is part of scheme
• Second buyer sells at profit
• Using trusts and quit claim deeds

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Foreclosure Scheme

• Prey on desperation
• Take deed to house promise to pay mortgage
• Accept rent from owner
• Refinance w/o homeowners knowledge
• Net result foreclosure

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Foreclosure scam mechanics

• The company promises to pay back payments
• You can refinance or take out another mortgage to
  pay off existing lendernot
• You may stay in the property and reclaim title
  later
• Upfront fee stops foreclosure
• They will work out an arrangement
• Deed transfer is temporary.

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How can it happen

• Legit short sales are subject to delay
• Lack of staff in banks
• No systems
• Complex esp if 2nd mortgage involved
• 50 never close
• Borrowers expected to pay during process

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Thank you..Questions???