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Herald investigation: State mortgage regulators allowed ex-cons and scam artists into mortgage industry

374mortage_standalone_prod_affiliatAs Florida's real estate market soared, state regulators allowed bank robbers, racketeers and other convicted felons to obtain licenses as mortgage brokers and work as unlicensed loan originators, giving them access to the most sensitive and personal financial information borrowers offer, a Miami Herald investigation has found.

The investigation, Borrowers Betrayed, documents a breakdown in the state's enforcement system created to protect borrowers. Since 2000, regulators failed to weed out people with criminal histories, monitor scam operations and discipline crooked brokers despite a law that requires them to be screened for criminal histories. But as questionable licenses soared, the state reaped record returns in licensing fees while the crooked brokers committed at least $85 million in mortgage fraud.

Despite repeated warnings, Florida's Office of Financial Regulation -- which polices the mortgage industry -- failed to act, allowing many of the scams to thrive until police finally cracked down. Read part one of the series here.


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Richard Anderson

For this to happen for as long as it has is appauling. Hopefully that is now a thing of the past.

Richard Anderson

Karyn Elliott

I have written to every government agency I can find and have been tossed one excuse after another and have been passed from one state office to another with no assistance or an explanation for being ignored. Just the other day I watched a news program filmed on Feb 16th 2009 of Senator Bill Nelson going throughout the Tampa Courthouse displaying the mold there, (nothing compared to the mold left for me in the home I bought), and what the workers are experiencing health wise due to this mold. Senator Nelson even claimed respiratory distress after just a tour of the courthouse; I had no choice financially but to reside in the toxic mold for nearly 3 years. All of those years in respiratory distress

What is it that makes those who work in the courthouse more worthy as human beings than myself? I pay my taxes, I educated myself in Florida colleges, and I suffer devastating health issues just as those courthouse workers do. The only difference is that my mold came in the form of mortgage and disclosure fraud and misrepresentation, perpetuated by the OFR’s negligence in giving a mortgage brokers license to a known to them criminal.

I have been victimized not only once by the crooked mortgage broker colluding with the sellers to put me in the contaminated home with a forged signature and altered documents. (I didn’t buy more than I could afford, nor did my finances warrant a predatory loan, I’m a veteran of the USAF).

Now I find I am victimized twice in finding that the OFR gave the brokers license to Art Seaborne, the mortgage broker, just 9 years after the OFR revoked his real estate license for mortgage fraud, oh and just one year after a chapter 7 bankruptcy… it doesn’t take a brain surgeon to see what is going to take place there does it??? (All this information was not easily accessible to find out before a closing).

Those of us left with nothing by the mortgage criminals the State of Florida licensed are again ignored and victimized by our Presidents mortgage assistance bill, which completely ignores those in this position who are the real victims of predatory lending and mortgage fraud. So it looks to me like its time the State of Florida stepped-up and took responsibility where it is most definitely due, they licensed the crooks after all.

I have moved from the house, which sits in Sarasota rotting to the ground from water intrusion and toxic black mold, with 2 liens on it for foreclosure. But I still pay each and everyday. I am awakening daily struggling to breathe. I take 2-4 pills each day just to get air in my lungs and go through a box of tissues daily before I can even start my day. It’s like getting a life sentence for a crime someone else committed, and no home to show for it. This is just plain wrong! Not to mention criminal actions by the State.

My court case has stalled because the sellers and the mortgage broker can afford high priced lawyers who just keep the case going to use up what little money I can make while they use the money they stole from me to fund their criminal activities and representation. This alone is where the States fraud victims fund is owed in assistance to those of us stuck fighting the criminals you licensed for our inalienable rights. After all OFR, you are supposed to be working through regulations to protect us from this type of crime.

I am a 48-year-old divorced woman who had so much promise for my future. I had planned to go back to UFS for my masters’ degree but can barely afford living expenses and a lawyer now.

I know through research that I am not the only one in this situation. That is why the victim’s fund must be brought back and used to assist us in our struggle, after all our hard earned money is now paying for the high priced lawyers your licensed criminals are hiding behind. The State of Florida cannot continue to hide the egg on their face. But you do have the opportunity to make good on this.

I would like the opportunity to address the legislature concerning the victim’s fund. We who are the victims are not just another situation we are human beings, tax-paying citizens who deserve to live and breathe and have our lives back.

Receiving assistance from this fund could very well mean the difference of living a full life or living a lifetime of sickness and financial disability to so many of us… your victims made so by your mistakes. I was raised that when you realize that you made a mistake and you are given the opportunity to rectify that mistake doing so is the only right thing to do. I am pleading with the State of Florida to rectify their mistake and save our lives. This is the State of Florida in the year 2009 for God’s sake, not the Wild West. I am on a mission to make things right, won’t you please stand-up and help me as you are the only ones who can?

A quote from OFR Terry Straub said… "We look at all the facets around, you know, whatever file, and we predicate on the fact that everybody deserves another chance," said Terry Straub, director of the OFR's Division of Finance, which regulates the mortgage industry in Florida.

Where is another chance for us Terry Straub? We did nothing wrong and lost everything!

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