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mitchiem
157 Posts |
 Posted - 05/09/2008 : 08:40:15 AM
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I had an audit that was sparked by a loan officer submitting 4 fraudulent files with fake income docs and assets docs.
I have 2 questions
1) What legal recourse do I have as broker against the Loan officer
2) What legal recourse do I have as the broker against the borrowers
3) We have a bond and we are being charged $20,000 in penalties due to the fraudulent files
I mandated in hosue processing for all loan but regulations will be flouted despites ones best efforts if a loan officer is determined to "outsmart" you.
Please advise cos I want to make sure these guys are brought to book...they submitted 4 fraudulent loans form 4 separate borrowers the common thread in all of the loans was not that it was the same borrower but it was the same loan officer.
I have run a clean shop for over 4.5 years no complaints or negative audits.
Please advise...this is very troubling to me
Thks
Mapiy |
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khoiey
1291 Posts |
Posted - 05/09/2008 : 08:50:25 AM
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No recourse. That's why you are the broker and broker assumes all the risks and any oversight of his/her loan officers.
quote:
Originally posted by mitchiem
I had an audit that was sparked by a loan officer submitting 4 fraudulent files with fake income docs and assets docs.
I have 2 questions
1) What legal recourse do I have as broker against the Loan officer
2) What legal recourse do I have as the broker against the borrowers
3) We have a bond and we are being charged $20,000 in penalties due to the fraudulent files
I mandated in hosue processing for all loan but regulations will be flouted despites ones best efforts if a loan officer is determined to "outsmart" you.
Please advise cos I want to make sure these guys are brought to book...they submitted 4 fraudulent loans form 4 separate borrowers the common thread in all of the loans was not that it was the same borrower but it was the same loan officer.
I have run a clean shop for over 4.5 years no complaints or negative audits.
Please advise...this is very troubling to me
Thks
Mapiy
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slants
4133 Posts |
Posted - 05/09/2008 : 08:56:09 AM
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| Other than firing the LO which I'm sure you have already done, I don't think there is much you can do. It is the broker's responsibility to supervise all activities under his license. Hopefully you have instituted QC procedures which were not in place previously. My former broker orders a 4506 on all full doc loans and a VOD on all verified asset loans processed in his shop because he too got burned by his LOs' fraud. Even if you can prevail in suing the LO, it would cost you more in legals fees than the judgment and the guy will more than likely be uncollectable anyway. The only thing to do is to start performing better QC to prevent any recurrence. |
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rtrefflich
2634 Posts |
Posted - 05/09/2008 : 09:05:57 AM
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| I think you could argue you are entitled for compensation from LO for his illegal activity. You could sue him for all of your legal fees, your increased premium on the bond and any other due compensation. The challenge will be collecting from him and putting the money out to pay for the lawsuit. |
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slants
4133 Posts |
Posted - 05/09/2008 : 09:06:58 AM
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quote:
Originally posted by Thats Devore
Slants is right. You could sue the LO just to make a point and send a message but you would rack up legal fees and end up with a judgment that would probably never get paid.
Anyone can file a suit for anything, but big IF whether he'd even prevail in court. If the LO claims that he received the docs from the borrowers, you'd have to prove him wrong. Not worth the battle in my opinion. Just a sad hard lesson about our business. |
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GWaldkirch
89 Posts |
Posted - 05/09/2008 : 09:10:53 AM
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| Employees suck!!!!!!!! (in most cases) I remember I caught a mistake one of my L.O's made and I told him never to do it again. I also said his mistake couldve closed me down. He gave me a stupid blank stare that said essentally yea......so I just go to work somewhere else |
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jscorbett
2748 Posts |
Posted - 05/09/2008 : 09:11:17 AM
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| I dont know why you are asking people on here ? Not that members may not know, but maybe I dont know you should ask someone who has passed the Bar ? |
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goodguy1
1559 Posts |
Posted - 05/09/2008 : 09:18:50 AM
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quote:
Originally posted by jscorbett
I dont know why you are asking people on here ? Not that members may not know, but maybe I dont know you should ask someone who has passed the Bar ?
but BO peeps are always in the know...Legal-shmeegal.. I think Poster's statments should stand up in court!
In all seriousness OP; you're on the hook. One main reason I'm not a fan of employees...tons of them are crooked. |
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slants
4133 Posts |
Posted - 05/09/2008 : 09:24:41 AM
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quote:
Originally posted by Banker0679
i would rather put a judgement on him even if it costs me.
he wont be able to buy a house for a long time. 20yrs in most states.
If he already owns a home, then you can put a lien on his home.
She'd have to get a judgment first, may be more time, money and emotional energy than she ought to invest into a bad situation. |
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JoefromPhilly
453 Posts |
Posted - 05/09/2008 : 09:25:43 AM
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This is one of the reasons why net branches have the problems that they do. LOs who could not give a damn about fraud and its impact on the company.
- Joe |
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Originate_This
291 Posts |
Posted - 05/09/2008 : 09:30:04 AM
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| Spend a couple hundred and speak with someone that actually knows the law. No one on here can give you anything more than a guess. |
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slants
4133 Posts |
Posted - 05/09/2008 : 10:03:18 AM
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quote:
Originally posted by Originate_This
Spend a couple hundred and speak with someone that actually knows the law. No one on here can give you anything more than a guess.
Need to be a member of the bar to file a case, but don't need one to know that #1, bringing a civil case to trial = many, many billable hours over a protracted period. #2, even if an attorney's assessment is that there is a viable case, no guarantee of a judgment at trial. #3, it will be very, very emotionally taxing to undertake such a battle. An attorney I consulted about a minor situation said to me in passing that he often turns clients away and advises people to find a way to settle because most situations do not warrant the $20,000 to $40,000 in legal fees to bring a case to conclusion. OP can consult an attorney for possible legal claims that can be made (if any) and try suing in small claims court for the state's maximum to save in legal fees. |
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Originate_This
291 Posts |
Posted - 05/09/2008 : 10:26:07 AM
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| I'm not saying that lawsuits are easy to win or inexpensive but for a couple hundred he can get an accurate assessment by someone competent. Once he has a better understanding of his legal situation he can make a better refined decision. This is already costing him thousands, wouldn't it be prudent to see what his choices are in obtaining repayment of at least some portion of his damages? |
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slants
4133 Posts |
Posted - 05/09/2008 : 11:22:08 AM
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quote:
Originally posted by Originate_This
I'm not saying that lawsuits are easy to win or inexpensive but for a couple hundred he can get an accurate assessment by someone competent. Once he has a better understanding of his legal situation he can make a better refined decision. This is already costing him thousands, wouldn't it be prudent to see what his choices are in obtaining repayment of at least some portion of his damages?
No one has advised the OP to forego legal counsel and rely on our opinions. These are just that, opinions which she came here to solicit. My personal opinion is that her "choices in obtaining repayment of at least some portion of his damages" are slim to none. Her chances of winning a judgment probably will not be great after spending more good money after bad money on legal fees because she the broker was the one who failed to do her due diligence and audit the files prior to funding. She has no claim against the borrowers who may actually have cause of action against her if push comes to shove because she failed to supervise her agent who committed fraud under her watch and potentially jeopardized their homes. Even if she were to win judgments, she will likely never collect. All that said, she should pay a fee to consult an attorney who may even tell her to file just to collect a retainer and invoice her for billable hours over the next 2 years. These are the decisions she needs to make in evaluating how to proceed. |
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mantixmortgage
2645 Posts |
Posted - 05/09/2008 : 11:25:23 AM
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| what happened with the loans? did they fund? were payments made? |
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aftc
28 Posts |
Posted - 05/09/2008 : 11:52:09 AM
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I am an attorney, not that I will be giving advice on this subject or any other for that matter. I do title work only.
But, I agree with Slants here.
Pay a consultation fee to someone who specializes in this area. He/She will probably tell you that you may win a judgment, which may or may not ever be collected, "but slide a $10,000 retainer to me and we will open a file and get started..."
Not a good situation, it appears that the $20,000 is long gone.
Sorry.
Rick
All Florida Title Company |
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cspatmon
1083 Posts |
Posted - 05/09/2008 : 4:38:25 PM
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| Seek legal advice from an attorney that specializes in the field of your inquiry. |
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