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Special Reports
Mortgage Fraud
Fraud Trends Spur Wholesaler to Fight Back
By James Comtois
LAKE FOREST, CA--American Guardian Home Loans here is starting a movement to protect
broker reputations and legitimate borrowers by helping federal, state and local authorities fight against mortgage
fraud.
In addition to working with authorities in managing the current incidences of
fraud, American Guardian -- which specializes in alt-A and subprime credit loans -- has instilled new prevention
processes. The broker department is conducting more research on brokers before approving them. It will only do
business with quality brokers that are committed to the industry and are looking out for the borrower's best interest,
a company executive said. Additionally, it is sharing names and information with authorities and other lenders.
"We conduct business in 10 states and so far not one of our legitimate borrowers
has defaulted on their loan," said Kamran Khosravi, president of American Guardian. "What we have experienced
are brokers committing fraud and borrowers defaulting on those loans. This kind of conduct stems from borrowers
that are obviously unable to meet their mortgage commitments because the criminal broker inflated their asset and
income to falsely qualify the borrower. Therefore, the unwitting lender and borrower fall victim to the unscrupulous
greed of the criminal broker."
"We are not going to give up as some lenders do," he added. "We
will manage every single case of fraud committed against American Guardian Home Loans. We have successfully tracked
down all of the fraudulent brokers so far. Each has repurchased their loans in full, refinanced or is in the process
of either."
Jack Williams, president of the California Association of Mortgage Brokers applauded
American Guardian for its initiative and hopes other lenders will follow its lead. "CAMB, of which American
Guardian is a statewide affiliate member, takes ethics very seriously. In order to become a CAMB member, brokers
must subscribe to the CAMB Code of Ethics. Any unprofessional behavior by a member is subject to action by the
CAMB Best Practices committee," he said.
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