Sunday, September 14, 2008

Four Fraudulent Sentences

The Miami Herald today takes a look at how Florida became the nation's No. 1 venue for mortgage fraud -- and one of only three states in the country that offer "No Help for Mortgage Fraud Victims." It's part of a larger series of articles the Herald has been running called "Borrowers Betrayed."

As forty-seven other states do even now, Florida "once offered a program to reimburse people scammed by rogue mortgage brokers -- the money coming from licensing fees." But by the early 1990's fraudulent practices by "rogue" mortgage brokers who were licensed to do business by the state had become so common that the fund was running low.

A legislative task force dominated by real estate experts recommended reforms that would have preserved the self-sustaining fund and kept it financially healthy. Even the mortgage industry supported those reforms.

However, then-state Finance Director Randall Holland and then-Pensacola state senator W.D. Childers added "four sentences" to a bill "that effectively killed the Mortgage Brokerage Guaranty Fund."

It's quite clear Holland and Childers gutted protections for consumers purely for ideological reasons. They simply did not believe it is "a function of government" to protect people from the very con men the state government was licensing to do business.

Holland now lives in Las Vegas and claims he is making his living "as a professional poker player." Childers, of course, is still in jail after being convicted on corruption charges.

We sense there's a lesson in all of this, somewhere.

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