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July 22nd, 2008

Florida Hired Ex-Felons as Mortgage Brokers

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The Miami Herald reported on Sunday that Florida approved over 10,000 mortgage broker licenses for convicted felons since 2000. The Herald launched an eight-month investigation that prompted the state’s Chief Financial Officer Alex Sink to call for the resignation of Dan Saxon, Florida’s commissioner of the Office of Financial Regulation. Sink is also calling for an executive order to stop issuing mortgage broker licenses to convicted felons.

Florida’s current law is supposed to deny mortgage broker licenses to felons who have been convicted of fraudulent crimes. The investigation reported that over 4,000 licenses were issued to felons who were convicted of crimes such as fraud, extortion, racketeering, and bank robbery.

This news isn’t all too surprising for a state that has been ravaged by the housing crisis. But other states like Colorado and Alaska, about which you don’t hear of much in regards to the mortgage crisis, do not require licensing to become a mortgage broker, and thus have had similar problems with mortgage fraud.

A proponent of the housing rescue bill currently being debated in Washington contains a proposal for a national registry for both loan originators and mortgage brokers. A national registry could prevent fraudulent brokers and originators from spreading their crime from state-to-state.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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