Lowell Tuttle
Lowell Tuttle
I have been thinking a lot about this mulitple mortgages considered primary address "fraud" which apparently has become front and center with both Paxton and Lisa Cook, our Fed member under Trumprutiny....
I am sorry, but most people complete applications for underwriting insurance, loans, etc...as quick as can easily be done. And, busy people (rich) probably don't complete them at all, someone else does...
You get to a question with a dropdown box. (This happens in homeowners insurance all the time, so I am assuming it is the same with mortgage loan disclosure documents.) What is this property going to be used for? Vacation? Tenants? Secondary? Primary? You select an entry. An underwriter reviews or even AI reviews the answers to the questions. Financial score? 850 is the highest, so Transunion/Choicpoint/Equifax all review these default questions and answers. It is really a minor thing at the stage of completeing the application. Then they ask for copies of stuff pertinent and they get submitted...The mortgage broker submits and chooses the best known mortgage company (or the one which pays the most commission.) The investors/lenders are happy to get such a prominent score and it all goes through, closing...the underwriters, title company people take over...they review most of the questions...If someone selected Primary in the dropdown, probably it is assumed they'll be selling their prior residence, or changing it to secondary or vacation, because who wouldn't want to live in this new residence.
The County (or whatever tax office) gets the deed data and everything looks good an goes through. Eventually there is a County tax office circumstance...and perhaps a screening at the tax records shows someone has violated or mis construed, or even downright defrauded the system...
In any case, the jurisdiction of the tax office (and remember, we have big property taxes here in Texas, Ms. Lisa Cook may have minimal property tax rules in effect in her area,) would take over here.
Someone at the tax office picks up the discrepancy, sends out the different property tax (non homestead) amount and the owner either pays or disputes, showing they have some exemption to the rule that applies.
As we all know, mortgages are bought and sold and rated at a certain level based on a lot of criteria...We all witnessed what happened during thee 2006-2008 mortgage crises as they don't just have investors one mortgage at a time, but in bundles...
The only thing that makes this process illegal is the rules of Federal mortgage insurance requirement. I don't think there is a mortgage fraud enforcement bureau out there gathering evidence and bring actions against people doing this. Certainly if a person is buying a 1 million dollar home or more...as they probably don't even have mortgage insurance. The protection of this is all for the investors. Pay more than 20% down and you don't even have to have mortgage insurance.
1 or 2 points on a mortgage is what we're talking about getting out of. Personal favors for rich people is de riguer in Texas and in financial lives. If there is ever a problem, the reposession and sale takes care of the investors...The exception being a casualty loss, which is where insurance comes in.
So, calling Paxton and Cook mortgage crooks is a pretty bit lunge. More than likely they don't even know what they did was illegal...Some kid underwriter filling out the form just clicked the wrong dropdown box...Nobody ever taught them better...
At least that's the benefit of the doubt thought of the day.
I would defer to Ron Knight on this issue...Is there any enforcement of this issue going on I don't know about?
I guess enemies of Ken Paxton (lots) or enemies of Lisa Cook (Trumpies?) somehow figured out the interest rate these two persons might be paying lower than they should on these secondary properties.
I wonder how they got that information? It would seem to me to be a violation of the Fair Credit and Reporting Act to randomly use investigative websites or financial availabilities to get that data. The penalty for violating those rules and regulations are just as significant as the mortgage fraud penalties...
It's like violatin HIPPA...
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