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Mortgage Brokers with Criminal Backgrounds
07/21/08 - 03:01 PM

Associated Press

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Florida Chief Financial Officer Alex Sink says she is, quote, “just sick” by revelations that thousands of ex-convicts, some with prior convictions on fraud, extortion and even bank robbery, were issued licenses to become mortgage brokers in Florida.

The eight-month investigation by the Miami Herald found those same criminals then bilked Floridians of about 85 million dollars by stealing homes, money and people’s identities.
   
The report says the Florida Office of Financial Regulation issued licenses to more than 10,000 people with criminal records, including thousands who had served time behind bars for fraud, racketeering and extortion.

The office is also accused of failing to perform criminal background checks most of the time, despite a state law that mandates such checks.

The man in charge of the Office of Financial Regulation, Commissioner Don Saxon, says he has no idea why his staff issued licenses to bank robbers and those convicted of fraud.

Chief Financial Officer Alex Sink says Saxon should be fired. She says she had no idea about the mortgage licensing problem and she is stunned by the report.

Sink is also calling for an investigation of how the problem happened, and she wants the governor to issue an emergency rule to stop the state from issuing any more licenses or renewals to mortgage brokers who have criminal backgrounds.

She says there is a need for stricter licensing rules for mortgage brokers. Sink argues there should not be any second chances in the mortgage industry for ex-cons convicted of financial fraud.

Sink accuses state regulators of being “asleep at the switch” and failing to protect Floridians from criminals.

Sink, the chief financial officer for Florida, was asked if she also was asleep at the switch. She rejects that notion, saying she is just one of four members on the Financial Services Commission, which supervises the Office of Financial Regulation.

Sink, Governor Charlie Crist, Attorney General Bill McCollum and Agriculture Commissioner Charles Bronson make up that commission.

Valerie Saunders of the Florida Association of Mortgage Brokers says her organization has been aware of brokers who were “doing the wrong thing” and not working for consumers. She says the association favors stricter state and federal licensing rules to eliminate those brokers who are preying on people.

Pam Ricco of the Florida Bankers Association says it’s unfortunate so many criminals were allowed to work in the mortgage industry and hurt so many people. She says banks have tougher lending standards and are the safest place to get a loan.

(Copyright 2008 by The Associated Press.  All Rights Reserved.)