As 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.