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Judge slams originators in mortgage bond case

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Mortgage Professional America | 14 May 2015, 07:30 AM Agree 0
The judge who ruled that two large banks had misled Fannie Mae and Freddie Mac also had some harsh words for originators.
  • Bruce | | 14 May 2015, 08:22 AM Agree 0
    This can't be - these are banks, not brokers. The originators for the banks are suppose to be highly trained and because of this don't have the education requirements, or licensing requirements a broker, or non-bank, has. I guess the CFPB will have to come up with another regulation to squeeze the broker out of business so the banks can continue "business as usual."
  • | | 14 May 2015, 08:44 AM Agree 0
    Well said Bruce!
  • J.A.Castro | | 14 May 2015, 09:05 AM Agree 0
    The word "originator" before Dodd-Frank had a different definition than its meaning today. I fearless challenge anyone accusing brokers as having their own underwriting guidelines for residential lending purposes. Underwriting Guidelines belong to the LENDER not the broker. As of today's definition...brokers are the originators.
  • Tony | | 14 May 2015, 09:24 AM Agree 0
    In today's compliance/regulation world, how does the originator have any control over appraisals & underwriting decisions? I wish I could get every mortgage I wanted to originate approved & closed per my assessment!!
    UW reviews all appraisals, and credit/income/debt ratios (and sometimes a second QC review of the file) - seems that the guidelines and/or underwriting is the real culprit!
  • | | 14 May 2015, 09:42 AM Agree 0
    If you read the reports about fraud, etc... the majority of it is done by appraisers, bank people, title companies, investors and others. Only a small portion was committed by broker/originators. But as always, we are the scapegoats.
  • Will | | 14 May 2015, 10:00 AM Agree 0
    As an appraiser for the past 37 years, I can say from direct experience how absolutely corrupt the mortgage brokers and mortgage bankers became by 2005. Mortgage fraud was standard practice. It got so bad that I gave up residential appraisal work for 4 years and did commercial appraisals during this period. Bank of America should have called me first before they bought Countrywide. I could have saved them billions in future losses. Countrywide was the #1 crook during this period.
  • Kevin W. Hardin JD, CMB | | 14 May 2015, 11:41 AM Agree 0
    If you read the decision, the Judge is NOT talking about the Loan Officer as Originator. They are talking about the Seller / Funder of the mortgage to Nomura and RBS as the defined Originator. This is an education opportunity for the media as well. A Loan Officer is NOT an Originator for the purpose of these suits. A Mortgage Broker is NOT the Originator, for the purpose of these suits. The Correspondent that underwrote and funded the mortgage ARE the Originator for the purpose of the suit. Let's not make the same jump to conclusions the media did that led to so much misinformation on Mortgage Brokers.
  • Bliss98 | | 14 May 2015, 12:57 PM Agree 0
    Countrywide was not a broker....
  • Cesar Perez | | 14 May 2015, 02:20 PM Agree 0
    Perhaps the judge confused the terms originators and underwriters; as mortgage brokers we provided the information the underwriters required and they were the ones making the final decisions. Furthermore, the lenders introduced very aggressive programs ( to say the least) that ultimately backfired! The crisis could have been avoided by just increasing the amortization time to where the payments would have remained manageable for the borrowers...Sometimes, you wonder if the crisis was created by the same institutions that it destroyed; perhaps, they did not expect the economic tsunami that got originated to be as devastating as it was...
  • | | 14 May 2015, 02:44 PM Agree 1
    Actually Bruce-the RBS was on the hook for mortgages that were originated-it did not declare that they were originated in the "Bank World" vs. the "Broker World".

    I have met some brokers that were suspect just as I have interviewed some bankers that were suspect. This is not a broker/banker issue it is a mortgage industry issue. The purge did not do as well as we all wanted to clean up the business and because it has not it will cost all of us that do business above board and with a good to great understanding of the rules an injustice.
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