Industry News

Six mortgage brokerages shut down after random inspections

Massachusetts cracks down on mortgage fraud in low-income communities

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Surprise examinations of mortgage brokerages and lenders in low-income communities in the Boston area are part of a coordinated effort by Massachusetts officials to crack down on mortgage fraud. In recent weeks, the Massachusetts Division of Banks has issued cease-and-desist orders and closed the doors of six mortgage brokerages that allegedly submitted false information about borrower's incomes to lenders. In one instance, a broker used a Web site approved by his company to verify salary information to instead systematically inflate borrower incomes by 125 percent, investigators said. In another, a broker altered a letter from an applicant's employer to conceal the fact that the worker made $11 an hour -- not $78,000 a year, as claimed. In other cases, brokers submitted loan applications with inflated incomes contradicted by documents such as W-2 statements and telephone work sheets. Commissioner of Banks Steven L. Antonakes told Inman News that although the initial sweeps were conduc...