Bill Brennan This is Me

 Web References

1. 1. Creative Loafing Atlanta | COVER | SUMMER GUIDE

   atlanta.creativeloafing.com/co - [Cached]

   Published on: 10/31/2002   Last Visited: 10/31/2002

   Mortgage fraud allegations such as Brennan's have become all too common in Georgia, where fraud cases have swamped the U.S. Attorney's Office over the past year. The Atlanta office has indicted 31 defendants in U.S. District Court on mortgage fraud charges since March. One official calls the breadth of the fraud -- which has touched 30 towns and cities in the metro area -- "an epidemic."
   
   If you add up the alleged damage in the indictments, the defendants duped lenders into approving $94.5 million in fraudulent loans on 250 homes. So far, 25 of the defendants have pleaded guilty.
   
   All the indictments describe how brokers, pseudo-brokers or scam artists falsified loan applications.
   ...
   In Darrisaw's application, Brennan noticed that she was described as a supervisor at Light of the World school -- which she was not. There was no mention of her real job at Imaging Technology.
   
   Brennan found that Bryant's application did list her real job, as an administrative assistant at SouthTrust Bank. But it also listed her as working a second job, as an accountant at Light of the World school earning $26,000 a year. Attached to the application are pay stubs and W-2s from Light of the World confirming she worked there. She didn't.
   
   ...
   The original application, which was in her late husband's name and which Brennan hasn't been able to obtain, stated Donald Anthony was a bus driver at Light of the World, according to Anthony.
   ...
   According to Brennan, it's extremely difficult to pin intent on lenders.
   
   The new law has replaced the "intent to foreclose" provision with one that makes it illegal, in certain circumstances, to approve a mortgage for someone who is unable to make the payments. A borrower's inability to pay is much easier to prove, Brennan says.
   
   But the success of the law depends on the ferocity of the Department of Banking and Finance in enforcing it. The department was formed nine years ago to regulate and license brokers and lenders -- partly in response to an increase in abusive loans. The department renews licenses yearly and is supposed to conduct a random inspection of brokers' and lenders' files every two years.
   
   Yet the department has been criticized for failing to crack down on mortgage fraud and other forms of predatory lending. With just two fraud inspectors to scour the entire state, it's not hard to see why the department has fallen behind.
   ...
   Today, it will take a tough law to force banks and lenders to loan money responsibly, Brennan says. He blames the explosion of mortgage fraud on a decade-old trend of selling and reselling bundles of mortgages.
   
   The bundles are sold as security to lenders, banks, pension funds and insurance companies. It allows one mortgage lender to reap immediate profits from the sale of the bundle, while another lender counts on the long-term payoff.
   
   It's an attorney's nightmare.
   
   Because the bundles can be sold repeatedly, the burden of responsibility for the loan shifts from a broker to a lender to another bank or lender -- one that had nothing to do with approving the original, possibly fraudulent loan.
   ...
   In the cases of Anthony, Bryant and Darrisaw, Brennan found that Official Mortgage got lending company Creve Coeur Mortgage Associates to loan the money for the homes.
   ...
   Brennan has since worked out a deal with CitiFinancial to put the foreclosures on hold pending the outcome of his investigation into the alleged frauds.
   
   He also has discovered a fourth falsified application, this one belonging to Bryant's sister-in-law, who hired Cornelius at Bryant's urging. When she fell behind in payments on the loan, she sold the house to spare a foreclosure.