Criminals Find Mortgage Lending An Easy, Lucrative Industry To Get Into

In Michigan, The Detroit News recently ran a story reporting how easy it's been for those with criminal inclinations to "drift" into the mortgage lending business, and how rampant mortgage fraud has been in the state.

• Danny Stokes used to sell drugs, before he discovered it was safer and more lucrative to sell mortgages. Samer Fawaz and Bashar Farraj were students in a mortgage fraud class where they learned to inflate appraisals and bilk lenders. They murdered one of their fellow con men in their Sterling Heights mortgage office when the scheme began to unravel. Nelson Sumpter served time for fraud in a scam that drew national media attention in 1994. That criminal record didn't stop him from beginning a new career as a loan officer. He was recently indicted for fraud. [...] Mortgage fraud was easy for Hani Mortada. And the money was a lot better than what he had earned as a part-time clerk at the Dollar Store [who] went from a struggling part-time college student in Dearborn to a mortgage loan officer with $25,000 in the bank and a Cadillac Escalade in his garage.

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• Sumpter, 42, of Pittsfield Township was indicted in September in what Wayne County authorities believe to be a scam to strip the equity from the homes of several elderly Detroit residents. The homes are now in foreclosure.

In describing how alluring the mortgage fraud business has been for criminals practicing their trade in other areas of criminal endeavor, a Wayne County assistant prosecutor explained:

• "You don't have to pull a gun on someone. You don't have to be on camera with a dye pack (as you are when robbing a bank). You're sitting at a desk. Someone brings you coffee. There's a lot of money, and sometimes it doesn't take any more than one forged signature," he said.

A local FBI official had this observation:

• "We are seeing people who two years ago were involved in drug trafficking," said Mark Bowling, supervisor of the FBI's regional office in Macomb County. They slide into mortgage fraud, he said, "because it's easier, it's safer and the amount of profit is incredibly high. Once they're in the mortgage fraud business, they see how easy it is."

For more, see Fraud deepens Michigan housing crisis (Metro Detroit's foreclosure explosion linked in part to mortgage scams).