Jailing Mortgagors Who Got 'Liar Loans'

Here's a pop quiz for readers of National Mortgage News: name one Wall Street or mortgage executive who's doing hard time for financial fraud as it relates to the nation's housing bubble/subprime crisis. Can't do it, can you. Let's face it: prosecuting mortgage fraud is tough unless these frauds occurred at the retail level. Angelo is not going to prison (he wasn't even indicted), nor is anyone from Ameriquest, Household Finance, Associates, take your pick. The folks who get nailed for financial crimes are the ones operating at the 'street level' where the rubber meets the loan — that is, where the loan application is made. This involves retail loan officers, loan brokers, Realtors, speculators and all parties to housing 'flip' schemes. Recently, The New York Times made a big splash with its Sunday weekend report on Charlie Engle, 48, who is now serving a 21- month sentence in West Virginia for exaggerating his income on two "liar loans." Engle also was ordered to pay $262,000 in restitution to Countrywide Financial, his original lender.