Consumer Advocates: Stop South Carolina Mortgage Fraud
Whatever doors through which mortgage fraud is continually perpetrated need to be slammed shut in South Carolina.
That was the message of the state’s consumer protection agency Monday.
According to the Myrtle Beach Sun-News, the South Carolina Department of Consumer Affairs called Monday for tighter regulations on area mortgage brokers and other lenders and more state laws regulating the industry.
“The [South Carolina mortgage] lending industry essentially goes unregulated,” said Charles Knight, a staff attorney for the consumer affairs department.
The department wants lawmakers to create a bill that would license both brokers and providers of mortgages. However, no lawmaker has yet signed on as a sponsor, according to Brandolyn Thomas Pinkston, administrator for the consumer affairs department.
Pinkston and Knight spoke during a news conference with U.S. Attorney Reggie Lloyd and FBI and IRS officials.
The FBI lists South Carolina as a “hot spot” for mortgage fraud, and an independent research institute ranks the state 19th compared to rates of mortgage fraud in other states.
However, South Carolina’s standing in the independent research institute’s ranking has dropped since it was ranked highest in 2001.
Pinkston credited the improvement to increased prosecution of people who commit mortgage fraud.
In the last three years, Lloyd’s office has obtained convictions against 80 real estate agents, mortgage brokers, home appraisers, closing attorneys and others involved in real estate and lending.
Mortgage fraud comes in several forms, Knight said.
Some people report inflated incomes on loan documents so they qualify for larger home mortgage loans for bigger houses they cannot afford.
Others submit two separate mortgage applications for one piece of property and pocket the extra money when both are approved.
SOURCE: Myrtle Beach Sun-News