Miami Herald: State Regulators Let Mortgage Crooks Keep Working After Catching Scammers Stealing Homes, Loan Proceeds

The Miami Herald yesterday published Part 3 of their three-part series, Borrowers Betrayed, on how the State of Florida reportedly let criminals run wild in the mortgage origination industry. Yesterday's report begins:

• When state regulators showed up at Samantha Johnson's mortgage company, she had already stolen her first house. She had forged documents to fleece lenders. She had skimmed money off a customer's loan. She had lied to conceal 19 questionable mortgages. Florida regulators caught all of that, but they didn't revoke her license or call for a criminal investigation. Instead, they fined her $4,300 -- less than the commission on a single mortgage -- and made her promise to stop breaking the law. Case closed.

• Back on the prowl, Johnson went on to steal $2.5 million in loans and nine more homes -- including one from a recently widowed, disabled Vietnam veteran and another from a blind, 79-year old woman with Alzheimer's disease.

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• Time and again, regulators caught mortgage professionals breaking the law -- fraud, forgery, and stealing from clients -- but allowed them to stay in the business with few consequences during the richest housing boom in state history, The Miami Herald found.

For more, see State let crooked brokers keep working (State regulators caught mortgage professionals breaking the law but allowed them to stay in the business with few consequences, The Miami Herald found).

For Part 1 (7-20-08), see Ex-convicts active in mortgage fraud (During Florida's housing boom, state regulators allowed thousands of mortgage professionals with criminal records into the industry -- costing consumers millions).

For Part 2 (7-21-08), see Thousands with criminal records work unlicensed as loan originators.