Massachusetts Governor Attacks Mortgage Fraud

As record numbers of people lose their homes, Massachusetts Gov. Deval Patrick called Wednesday for the criminalization of mortgage fraud, in addition to better tracking of foreclosures and education campaigns for would-be homeowners.

• Last year, a record-high 19,487 Massachusetts mortgage foreclosure filings were recorded in the Bay State.
• On the national level, RealtyTrac, which follows home mortgage foreclosure and default rates, reported this week that foreclosures surged by 47 percent in March compared to a year ago.

“It is vital that we have an effective and immediate action plan in place to help homeowners facing foreclosures,” Patrick said.
“Addressing the [Massachusetts mortgage] problem requires a comprehensive approach.”

Patrick said the state needs to provide better information for consumers - at the stage before they seek a Massachusetts home loan.

It also needs to create tougher regulatory controls over mortgage brokers and lenders, offer legal help for homeowners facing foreclosure, and crack down on people who engage in mortgage improprieties.

Patrick’s crackdown would include legislation to make mortgage fraud a criminal offense and prohibit abusive foreclosure rescue schemes.

It would require that, before any foreclosure can go through, a mandatory “pre-foreclosure notice” would have to be filed with the state.

The plan would also tighten licensing and education requirements for mortgage lender and broker groups, which would, at least in theory, eliminate the most disreputable firms and practices.

Patrick also proposed raising licensing and examination fees for licensed mortgage lender and mortgage broker organizations to increase enforcement capabilities, and creating a mortgage fraud unit.

SOURCE: Houston Chronicle