Investigative Report: Crooked Mortgage Loan Originators Have A Field Day in Florida As State Regulators Snooze, Pass Licenses Out To Nearly Anyone

In Part 1 of a 3-part investigative report published yesterday on what can be described as the betrayal of Florida home loan borrowers by state regulators, The Miami Herald I-Team reports:

• [S]ince 2000, [Florida] regulators failed to weed out people with criminal histories, monitor scam operations and discipline crooked brokers, a Miami Herald investigation found.

• State regulators allowed thousands of ex-convicts to enter a profession that gave them access to the most sensitive and personal financial information: credit cards, bank accounts and Social Security numbers. Those criminals went on to commit nearly $85 million in mortgage fraud, the newspaper found. They stole their customers' identities. They stole their money. They even stole their homes.

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• Beyond the licensing, regulators routinely overlooked or ignored complaints, allowing rogue brokers to flourish amid one of the biggest housing booms in state history. As the median home price reached an all-time record in Florida, and the Miami skyline erupted with gleaming new residential towers, fortune seekers rushed into the mortgage business in unprecedented numbers.

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• Don Saxon, commissioner of the Office of Financial Regulation, said he didn't know why his staff issued licenses to bank robbers and racketeers, but would look into the cases cited by The Miami Herald. ''You're asking me to get into the heads of the people who made those choices,'' Saxon said. He added: "Certainly we are not proud of the fact that these people have gone on to do bad things.''

For more, see Borrowers Betrayed (During Florida's housing boom, state regulators allowed thousands of mortgage professionals with criminal records into the industry - costing consumers millions).

In related reports published as part of Part 1 of The Miami Herald investigative report, see:

• Ex-convicts active in mortgage fraud,
• Identity theft is no bar to keeping a broker license (Almost three years after he was arrested for arranging a fraudulent loan, a mortgage broker still had his state license),
• For license renewals in Florida, no criminal background checks (The state relies on mortgage brokers to report new crimes they commit. The result: Hundreds retained their licenses after violations),
• A criminal past, a trail of new victims (A convicted cocaine trafficker with a mortgage broker license ultimately admitted that he fleeced 30 customers out of $2.8 million),
• Who's Watching The Brokers,
• Miami Herald video interviews with elderly victims who were scammed of their home equity by rogue mortgage brokers.