Comment entitled "Too Little Enforcement" on Disciplinary Actions Against Department of Housing and Urban Development (HUD) -Qualified Real Estate Brokers submitted by Charles Schmidt, Mortgage Fraud investigator

My job is to find fraud in mortgages both before and after they close. There is so much fraud that it is getting where underwriting becomes an investigation rather than an evalustion. HUD is partially responsible for this because there are no systems in place to deal with the borrower and little is done with Realestate agents, brokers, loan officers, appraisers, employers etc who will provide, or assist in providing, fraudlant or misrepresented information.Thus fradsters can make more money with a falsified document than they could robbing a convience store and the chance that anyone is going to investigate and take action is almist zero. This proposal does not go far enough. HUD refuses to be proactive in doing something about the fraud that is found by lenders either before or after the loan closes. If one lender turns down a loan because they found fraud, the borrower just goes to another lender who might not catch the fraud. It is like a game of catch me if you can. Home buyers are not detered from mortgage fraud nor are their Mortgage Brokers/loan originators because thsy know nothing will be done by HUD if the lender finds the fraud before the loan closes and that HUD's answer to Fraud found after the loan is insurred is to punish the lender by making the lender indemnify the loan even though the lender had nothing to do with the fraud. The proposal only deals with gift letters and underwriting. Removal from a n approved lists accomplishes little. HUD needs to prosecute. Real Estate brokers are also adept at falisfying W2 forms, Tax returns, Pay stubs, rental verification, bank statements etc, etc HUD's attitude if fraud is found in a loan, punish the lender. As long as that attitude exists, FRAUD IN fha LOANS WILL CONTINUE. HUD needs to take legal action against all who create or aid and abet mortgage fraud. This proposal is only a band aid against the real problem. Fraud is a criminal action and should be treated as such. This document is incomplete, there is no comment attached.