Lake Forest, CA–(HISPANIC PR WIRE – BUSINESS WIRE)–June 25, 2007–The subprime department of American Guardian Home Loans, a wholesale mortgage lender specializing in Alt-A and subprime, today announced that it is fighting back with top federal, state and local authorities against mortgage fraud.
Corrupt brokers are falsifying appraisals, property information and borrower tax returns, bank statements, pay stubs and W2 forms. This conduct is both a federal and state crime, which is prosecuted on an ongoing basis all across America. Broker and lender reputations have been compromised by blame for increased foreclosures, changes in lending programs and tightened underwriting guidelines. Fraud has played a significant factor in these circumstances, so American Guardian Home Loans is starting a movement to stop this criminal activity.
Large lenders typically count these fraud-ridden loans as a loss and small lenders go out of business as a result. American Guardian Home Loans is one lender fighting back to protect broker reputations and to help bring back loan programs that genuine subprime borrowers need to obtain in order to meet their needs.
“We conduct business in 10 states and so far not one of our legitimate borrowers has defaulted on their loan,” said Kamran Khosravi, president of American Guardian Home Loans. “What we have experienced are brokers committing fraud and borrowers defaulting on those loans. This kind of conduct stems from borrowers that are obviously unable to meet their mortgage commitments because the criminal broker inflated their asset and income to falsely qualify the borrower. Therefore, the unwitting lender and borrower fall victim to the unscrupulous greed of the criminal broker.”
According to the FBI, estimated mortgage fraud losses total between $1 billion and $4 billion a year nationwide. In 2006, the FBI received 35,617 reports of this type of crime.
“We are not going to give up as some lenders do,” said Khosravi. “We will manage every single case of fraud committed against American Guardian Home Loans. We have successfully tracked down all of the fraudulent brokers so far. Each has repurchased their loans in full, refinanced or is in the process of either.”
“I applaud American Guardian Home Loans for leading this call to action and inspiring and helping others to do the same,” said Jack Williams, president, California Association of Mortgage Brokers (CAMB). “CAMB, of which American Guardian is a statewide affiliate member, takes ethics very seriously. In order to become a CAMB member, brokers must subscribe to the CAMB Code of Ethics. Any unprofessional behavior by a member is subject to action by the CAMB Best Practices committee.”
“The level of fraud committed by mortgage brokers is the highest level I have seen in 22 years, it makes the Charles Keating and Michael Milken Era of the early 1980’s pale in comparison” said Michael Kenny, vice president-director, Quick$ale(R) Warehousing Banking Division with Gateway Bank. “With reduced loan volumes and lower quality applications in general, some unscrupulous brokers have resorted to mortgage fraud to offset their reduced earnings, which range from straw buyers, outright identity fraud, inflated appraisals to falsified income. But not to worry, the industry is catching up, tighter due diligence and quality controls, improved systems and technology are now catching the thieves before the loans even fund. American Guardian’s commitment to deal with this issue head on is inspiring and their 100 percent prosecution rate is a clear indication that these systems are working when properly employed.”
In addition to working with authorities in managing the current fraud, American Guardian Home Loans has instilled new prevention processes. The broker department is conducting more research on brokers before approving them as an American Guardian Approved Broker.
American Guardian Home Loans will only do business with quality brokers committed to the industry that are looking out for the borrower’s best interest. To take it a step further, they are sharing those fraudulent broker names and information with authorities and other lenders. For more information on steps American Guardian Home Loans is taking to combat fraud or to obtain a list of names of brokers that have committed fraud against American Guardian Home Loans, visit http://www.amguardian.com.
About American Guardian Home Loans
Orange County-based American Guardian Home Loans is a wholesale mortgage lender and wholly owned subsidiary of American Guardian Financial, a financial services provider. American Guardian Home Loans specializes in specializing in Alt-A and nonprime products serving the mortgage broker industry with an emphasis on meeting their needs and serving rather than selling. The company is licensed in Arizona, California, Colorado, Hawaii, Idaho, Florida, New Mexico, Nevada, Oregon and Texas. Its sister divisions include American Guardian Builder Division, division serving builders and Loan807, retail mortgage lender. For more information, call 877-960-5363 or visit http://www.amguardian.com and http://www.loan807.com.