Report mortgage fraud

We're not sure which is more troubling, that Stanislaus County appears to lead the nation for the risk of mortgage fraud or that people in the real estate industry know about the bad practices but aren't reporting them.

Either way, it's bad news that ultimately affects many residents of our community, even those who are not buying or selling homes.

Staff writer J.N. Sbranti reported on the issue in a package in Sunday's Bee that is also available on www.modbee.com. There are numerous types of mortgage fraud, some as basic as providing false information on a loan application, but others much more involved.

Sbranti described a particularly troubling practice in which unscrupulous listing agents form separate partnerships to buy foreclosed or short-sale property from the banks at rock-bottom prices.

They submit a very low bid for the property and fail to inform the sellers of higher bids. Then these agents turn around and sell the property to the higher bidders, making a quick profit in the process.

This helps explain why average sales prices remain so low in our region despite the brisk demand that normally would drive home values up.

Honest real estate agents are complaining about the practice, but they are not reporting it. They need to do that.

Even if they don't have all the evidence to prove fraud, their information can help the Stanislaus County District Attorney's Office identify the bad apples in the field and to prosecute them.

Ann Fulmer is vice president of Interthinx, an organization that helps lenders identify suspect mortgage applications. Her company has alerted its clients that Stanislaus, San Joaquin and Merced counties have some of the highest frequencies of mortgage fraud in the country.

Fulmer urges people within the community to not just avoid the suspicious individuals but to report them -- or else the whole community will be hurt.

Deputy district attorney W.R. McKenzie echoed those comments, telling The Bee, "If somebody doesn't tell us, we're never going to find out and the problem is going to continue."

People who suspect mortgage fraud have a moral obligation to speak up. Reporting improper business practices isn't ratting someone out, it's doing the right thing and helping your community.

Suspicious of real estate or mortgage fraud? Contact Glenn Gulley, criminal investigator for the Stanislaus County district attorney's office at 525-5550 or Glenn.Gulley@standa.org