Jail Time for Fraudsters - Short Sale Fundamentals
 
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16
Jan

Jail Time for Fraudsters

It looks like Michigan is getting tough, or at least trying to look the part. As the entire country has been reeling from the repeated shocks the housing system, Michigan has decided it’s time to try a heavy-handed approach. Just check out some of the new laws they’ve put into effect to deal with mortgage fraudsters:

- fraud committed on loans carries between $100k-$500k in penalties and 15-20 years in prison

- the statute of limitations on fraud is now 10 years instead of 6

- notary violations are punished by 14 years in prison

So it’s looking pretty scary to be committing fraud in Michigan. It should be scary to do it anywhere but you’ve seen how far that’s gotten us. So I applaud them for taking a tough stance since fraud eventually throws the market even further off track. All the progress we see is just on the surface and when the truth comes out it messes with everything and we have to start back on square one.

But (there’s always a “but” in my articles) I don’t know if stiffer punishments will really do the job. Attacking the risk involved with a crime doesn’t always deter someone from doing it – and keep in mind, the people committing fraud aren’t always bad guys, just decent people with no other options. Also, how will these things really be enforced? It’ll take years before the details of these new laws are really ironed out.

If they’re going to spend effort trying to deal with fraud in our country then the motivations need to be dealt with, not just the risks. Deal with banks making things up with no oversight. Talk to homeowners facing tough decisions and work with them. Avoid the fraud altogether, don’t just punish people after they’ve already done it.

I know there are no easy answers but dealing with half the story isn’t enough. If you guys have suggestions, please leave a comment and let others hear it. We need to be united to get our country moving.

  • the educator

    absolutely, its time to start dealing with causes and not effects, dealing with effects is the common response but it never solves the problem.
    shady underwriting practices to take advantage of people ruled by emotions instead of common sense. far too many people took on mortages they knew they couldn't afford or stated an income they did not have, these people should also be punished with the same stiff penalties if you knowingly lied on a mortage application you too should go to jail, because any way you try to slice it that is fraud as well. Far to many want to blame just the banks and well the banks were wrong but they were not the only cook in the kitchen so to speak, there is plenty of blame to go around and far too many homeowners did not want to accept responsibility for their fraudulent actions as well, if you do not make enough money to afford granite countertops and ceramic tile floors just because some shady loan orgination company says you can doesn't magically increase your income to meet with your desires.
      the origination officers could use a trip to the pokey also, you should never ever take advantage of your fellow man's emotions to wrongly make a buck and thats why so many ended up out of a job when the bubble burst. Do the right things and do right by people and you will always get positive results, do the wrong things and do wrong by people and as you can see it is what it is.

  • the educator

    absolutely, its time to start dealing with causes and not effects, dealing with effects is the common response but it never solves the problem.
    shady underwriting practices to take advantage of people ruled by emotions instead of common sense. far too many people took on mortages they knew they couldn't afford or stated an income they did not have, these people should also be punished with the same stiff penalties if you knowingly lied on a mortage application you too should go to jail, because any way you try to slice it that is fraud as well. Far to many want to blame just the banks and well the banks were wrong but they were not the only cook in the kitchen so to speak, there is plenty of blame to go around and far too many homeowners did not want to accept responsibility for their fraudulent actions as well, if you do not make enough money to afford granite countertops and ceramic tile floors just because some shady loan orgination company says you can doesn't magically increase your income to meet with your desires.
      the origination officers could use a trip to the pokey also, you should never ever take advantage of your fellow man's emotions to wrongly make a buck and thats why so many ended up out of a job when the bubble burst. Do the right things and do right by people and you will always get positive results, do the wrong things and do wrong by people and as you can see it is what it is.

  • Dion Wright

    question: why is it fraud after the homeowners default on loans and go to desperate measures to keep a home? why wasn't it fraud when subprime mortgages were being given away to everyone with a pulse? an ounce of prevention is worth a pound of cure – to everyone but the government



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