‘Fraudsters’ use ‘frauds’ to get a loan from banks
The federal government is investigating a practice of fraudulent lenders and mortgage brokers that helped drive up home prices, according to the Office of the Inspector General.
The inspector general’s office found that mortgage brokers and servicers used a series of tactics to defraud borrowers in the wake of the financial crisis.
The watchdog office said that servicers and brokers were making mortgage loans that were not insured by the government, and that they were “unable to identify the risk of a loan.”
It also said servicers sometimes sold the same loan to borrowers who did not qualify for it.
The mortgage loans were made at a time when the federal government did not have the money to help millions of Americans who were underwater.
It said that the servicers were also selling mortgages at inflated rates, which allowed them to avoid paying interest.
In one instance, servicers sold a $300,000 mortgage to a woman for $2,000 a month, according the inspector general.
But the mortgage was only worth $200 a month because the borrower paid interest, according with the report.
The report comes as President Donald Trump continues to push for tax cuts that would help middle-class Americans, while also boosting corporate profits.