Tagged: mortgage

Michigan Attorney General Bill Schuette announced today he' s filing a criminal charge against Lorraine Brown.

Brown is the former president of a mortgage records company in Alpharetta, Georgia. She's accused of 'robo-signing' more than 1,000 signatures on home mortgage documents from Michigan.

The Detroit Free Press reports that Brown will be charged with racketeering:

The charge is part of a state investigation, begun in April 2011, into the practice of “robo-signing.”

At a late morning conference, Schuette said Brown orchestrated a robo-signing scheme and directed her employees to sign another bank official’s name to mortgage documents, speeding up the process and making more money for her firm.

He said arrangements are being made for Brown to surrender to Michigan authorities.

"She got greedy, and as a result she's facing a 20-year felony," Schuette said.

Brown pleaded guilty to similar charges in Florida. From Reuters:

"Lorraine Brown participated in a scheme to fabricate mortgage-related documents at the height of the financial crisis," Assistant Attorney General Breuer said in a statement. "She was responsible for more than a million fraudulent documents entering the system, directing company employees to forge and falsify documents relied on by property recorders, title insurers and others."

Reuters reports Brown has also agreed to plead guilty to Missouri state charges of forgery, perjury and a misdemeanor count of making a false declaration.

Michigan Supreme Court Justice Diane Hathaway is being investigated by the FBI for possible mortgage fraud, The Detroit News and Free Press report.

In 1950, more than half of Americans owned their homes free and clear. No surprise that number has shrunk over the years.  But those who count themselves mortgage-free are still out there. The 2010 U.S. Census shows 1 out of every 3 homeowners owns their home free and clear. In a story produced for Marketplace Money, we look at what it takes to become mortgage-free.

Meet the Murphys

Mike and Kate Murphy live in a working-class neighborhood of Chicago, with two of their kids, Becky and Tommy, and their pet fish. They bought their charming, 3-bedroom brick house in 1996 for $156,000.

They originally started with a $110,000 mortgage. Mike Murphy says it was " obviously the largest mortgage we had ever taken out."

At the time, Kate brought in $30,000 a year, designing theater costumes part time. Mike was making $50,000 as a public school teacher:

At first they paid $1,100 a month on the mortgage. Refinancing dropped the payment to just under a $1,000. But they decided to pay a little more each month -- first $100, then $150 more.

Fast forward 13 years and they owned their house free and clear.

A new report lays the blame for much of Detroit’s foreclosure problems at the feet of one of the nation’s largest mortgage lenders. 

In 2003, Washington Mutual Bank’s CEO said he wanted to turn his bank into “the Wal-Mart of Banking."  His plan was to focus on low and moderate income borrowers deemed “too risky” by other lenders. 

By 2008, federal regulators seized Washington Mutual and the company filed for bankruptcy protection. 

What happened? 

Washington Mutual had taken major losses in the subprime loan market.  Its subsidiary, Long Beach Mortgage Corporation was for a time the second biggest subprime mortgage lender in Detroit.  Between 2005 and 2007, more than half of those loans ended in foreclosure.

Michigan U.S. Senator Carl Levin says Washington Mutual’s subprime loan practices “devastated” neighborhoods and families in Detroit.  At the end of a year long investigation, Levin’s released a report blaming reckless lending and lax federal oversight for the near collapse of the nation’s banking system in 2008.