Refinancing a home can be a complex, confusing process in the best circumstances. It’s harder if your mortgage representative is lying to you. His lies could cost you thousands of dollars in bogus fees or even your home.
People who relied on Jimmy Osborn learned this the hard way.
Osborn, a salesman who worked for several Orange County mortgage companies, stole $550,000 from his clients and caused 10 families to lose their homes to foreclosure.
Osborn’s story reveals the lack of protection for mortgage borrowers under state law.
To read part 1 of the story, click here.
For part 2, click here.
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Posted in: Crime • Defaults & Foreclosures • Fraud • Legal problems |
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Refinancing a home can be a complex, confusing process in the best circumstances. It’s harder if your mortgage representative is lying to you. His lies could cost you thousands of dollars in bogus fees or even your home.
August 18th, 2008 at 9:42 am
Rot in hell.
August 18th, 2008 at 11:48 am
Luckily he was the only bad apple…. the rest of the mortgage brokers are totally clean….
August 18th, 2008 at 8:05 pm
Real Estate Agents, Appraisers, Mortgage Brokers should be investigate and punish by laws to full extend.
Banks & Investors are going to pay the price dearly. More to come.
August 19th, 2008 at 4:38 am
But this is California, for anything less heinous than slitting a woman’s throat, he’ll be given a medal and turned loose… oh wait, he’ll be turned loose if he does that, too.
August 19th, 2008 at 10:41 am
550k and the guy still looks like an obese beat up dog.
August 19th, 2008 at 11:46 am
A realtor by the name of George ( first name only for now) with the help of DHI Mortgage (home finance arm of DH HORTON HOME BUILDER) purchased ten homes at one time, most of which going thru….you guessed it, Indymac Bank.
He rented the homes and made one or two payments and left unsuspecting renters high and dry and yet he still is practicing real estate in CA, specifically in Orange County.
August 19th, 2008 at 1:39 pm
No different than any mortgage broker who gave a stated income loan.
August 19th, 2008 at 3:09 pm
Actually a really big difference. You can be discliplined by your broker or the Dept. of Real Estate if you engage in activities deemed to be illegal. Also it is a FEDERAL CRIME TO LIE ON AN APPLICATION FOR CREDIT.
August 19th, 2008 at 3:55 pm
Please don’t lump all mortgage brokers in together. That is a mistake. I can not count the numebr of buyers I told NO to. No you can not afford this home, No, you can not lie on your application, No I will not take a forged W2. Seriously.
I have said before and I will stand by, there are no bad loan programs. Just programns matched incorrectly with borrowers.
Stated income was never supposed to be used for fraud. Any self employed person can tell you that sometimes what the bank will allow for qualification on a tax return vs what they can truley afford are 2 different things.
Stated income should not have been used as liers income, but it was. Banks,and Wall Street WANTED these high risk loans. The amounts they were offering to every broker out there to get them to sell these loans amounted to bribery in my opeion, and was just too tempting for many to turn down, even when they should have.
The banks basically said “lie to me please” and we will look the other way. How else can you explain a loan getting approved for a gardenr where the income looked like that of a highly skilled surgen? Come on.
Brokers submit all the information requested by the banks according to the guidelines provided for approval by the bank. Banks have any number of ways to verify that information and are free to ask for additional proof, or documentation or conditions if a file looks suspicious. They should have. or turned it down. They knew the risks they were taking and wanted more. Higher risk = higher charges = higher profits
I agree this guy should rot, but so should the banks that undrewrote the loans. And maybe the borrowers should have looked down the road to the inedivitable piper that would need to get paid.
Unless this broker found a notary that hid certain parts of the Note (mortgage agreement) the borrower should have been reading that Note and asking questions. The blame for this mess is wide and deep. From the wall street to the borrowers. Noe one is innocent.
August 25th, 2008 at 10:11 am
Tough love mortgage broker, as I have said time and time again, the greater level of accountability lies with the person that presumably carries the higher level of expertise, otherwise we would all have to be MDs in order to receive any medical advice. The greater burden, or blame, lies with the brokers, AE’s and LO’s.
I am hoping that there are more lawsuits filed against brokers/AE’s/LO’s for fraudulent misrepresentation. At least that way they will be held at least somewhat accountable for their actions and words, and the few that are still in business will be on notice.
I too have heard and personally observed attorneys forged grant deeds, notes from AE’s in loan files instructing to “do a better job” with the forgeries (who continued to be employed after discovery) and these people were not the minority. Those are just two examples as there are too many to list.
I am astonished that someone would even think to blame investors for their own greed!
In my career in the mortgage industry (in compliance) I have met one person…. ONE…. that refused to forge documents or misrepresent the borrower to anyone at the request of the broker. He funded only a couple of files a month at the peak of the industry.
August 30th, 2008 at 9:10 am
The last name is Barr.
August 31st, 2008 at 7:34 am
Melanie,
Great post. I’ve been an LO in Orange County for 10 years and during the boom I used to wonder how I was out produced by newbies coming off the street to close 10+ loans per month. I never closed more than 7-8 and averaged 4 fundings throughout the boom and still average 4 fundings today. One point of contention, homeowners are NOT without blame. I turned A LOT of people down who would go to the competition to close their loan. I’d have borrowers call me back after I turned an application down to gloat, threaten to sue me for discrimination or file a complaint with the state because, after I denied their application, they’d close with the competition. There are too many shady characters in the mortgage business but I find it ironic homeowners didn’t (and still don’t) see the connection between easy money and rising home values. You can regulate greedy mortgage brokers but its far more difficult to regulate the greedy public.
September 5th, 2008 at 7:08 pm
Vigilantism, that’s what warranted.