Q-and-A with a reformed mortgage crook

All of it again; you are going to see income documentation; you are going to see the assets, the down payments; all of it is going to be there. You are going to see every bit of fraudulent bank loans, verifications of employment, income, paystubs, W-2s; you're going to see it all again. You go to the Internet in today's world you can print (false statements of) any of them.

What do you think of the new Consumer Financial Protection Bureau rules? You are saying we will see fraud all over again. Will these new rules at least reduce some of the fraud?

It should. Its ultimate goal is to reduce it. It should keep mortgage companies in check, but the CFPB is an entity; there's one of them and there's 100,000 banks. If (scammers) keep away and don't draw red flags to themselves, the brokers and the mortgage lenders won't be scrutinized by the CFPB. I love the CFPB. I think it's good that they are there. But the fact is they need to be quick to hammer down, make it be known that they are there.

Is there a way to stop mortgage fraud with regulation?

No. Do you stop speeders? You have speed limits. You're always going to have somebody who pushes the envelope. Speed limits don't keep you from going too fast. Shoplifting signs don't stop shoplifters. Murder doesn't stop because it's against the law.

Were you ever afraid of being caught?

You become invincible, you think. You think you've got it all planned out. At the end it got sloppy, not on my end but on the other people's ends, so that's when I walked away.

How long did you do it for?

I was in banking for a long time, but the fraud ring was probably five years.

Do you regret what you did?

Absolutely, we make terrible choices. Those choices don't define who we are today. If I opened up every person's closet in that room (points toward adjoining conference room), I would find skeletons. I'm just one of the people who steps up and talks about it. I don't want to see the newbies coming into the industry or even the old people make those terrible choices because we live with our choices.

Why did you do it?

Money. It's about money. And you also get the mentality that you are helping people. Because if you wanted a nice home and you are a neighbor of mine and your husband said, "I really wanted to get this for my wife. Kevin, I can afford it," then you know what? I'd say, "We're going to help you out." And that's how it is. It gets out of control because if everybody comes to you, how do you tell them no?

Any other tips for consumers?

Keep your eyes open. Pay attention. If it sounds too good to be true, it is too good to be true. Pay attention when somebody asks you to sign a document and they'll fill in the rest -- don't sign it. Say, "You know what, give me a copy of it, I'll handwrite it and fill it in."

Look at the final documentation before it's submitted. If you've got a foreclosure going on, pay very close attention. Do not deed your house to somebody else. Don't make payments to anyone other than the bank that originated your loan.

Make sure you get all the documentation when you are making payments. Do not send your payment to somebody else. Do not let them tell you they are going to rent it back to you or you can live in it and it will become yours. Just don't.

You mentioned giving out your mother's maiden name is a common mistake. Why?

The maiden name is the information that's the connecting point for everybody because whenever you are asked for a password -- "What's your mother's maiden name?" -- with that information I can find anything. I always tell people not to use the maiden name. Use your father's middle name. Something you'll remember but nobody will think of.


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Claes Bell

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