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The Mortgage Bankers Association has been holding their fraud conference over the last four days, with 660 industry professionals in attendance.

I was on the speaker panel today for the “Stories from the Street” portion of the event, along with the Chief Compliance and Ethics Officer for Fannie Mae, and the president of a local 100-person mortgage-banking company.

My takeaways:

1. With all the new regulation of the mortgage industry, it is hard to fudge on your loan application, and get away with it.

2. The regulations have added considerable cost to running a mortgage operation, and the threat of buying back loans has run many out of the business.

3. In other words, the mortgage business has cleaned up nicely, and full-doc is good-doc.

4. Fannie Mae believes that effective short sales are generally a good thing, providing a gracious solution for people in their time of need.

5. Realtors are under-regulated, and are having their run of the joint.  Guided only by the flimsy Code of Ethics without any enforcement whatsoever, realtors see other realtors committing fraudulent acts that cause big paydays, and figure they should do it too.

One of the best parts of these speaker panels is getting to meet attendees at the end.

I met one of BofA’s main fraud prevention guys, who told me to report any and all fraudulent behavior to him regarding BofA-related short-sales, and he has the ability to take corrective action.

Then a H.U.D. representative said that anyone can report mortgage fraud here:

http://www.hudoig.gov/hotline/hotlinereportform.php

If you know of any fraudulent behavior on an active BofA short-sale, forward it to me and I will get it in the right hands.

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