Industry News

Real estate fraudsters should pay up

Mortgage industry needs to make crimes more costly for perpetrators

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SAN FRANCISCO–Committing mortgage fraud should carry a cost to those who perpetrate it, from being reported to the police to having business dry up. That's the view Erik Stein shared Tuesday afternoon during a session on identity theft and mortgage fraud at the Mortgage Bankers Association's annual convention. Stein, EVP and director of fraud prevention and investigation at Countrywide Financial Corp., believes the mortgage industry should make those who commit mortgage fraud pay for their crimes. Mortgage fraud is rampant and can cost lenders and consumers millions of dollars. Perpetrators often use sophisticated rings of professionals to bilk lenders out of money. The crimes can take years to investigate. Stein said the industry should start by not working with people who have a history of being involved in fraud, which can be accomplished by maintaining an internal "do not use" list of professionals, from real estate agents to appraisers to mortgage brokers. "If you commit a...