Florida let crooked brokers keep working

[DogPoundPup]

When state regulators showed up at Samantha Johnson's mortgage company, she had already stolen her first house.

She had forged documents to fleece lenders. She had skimmed money off a customer's loan. She had lied to conceal 19 questionable mortgages.

Florida regulators caught all of that, but they didn't revoke her license or call for a criminal investigation.

Instead, they fined her $4,300 -- less than the commission on a single mortgage -- and made her promise to stop breaking the law.

Case closed.

Back on the prowl, Johnson went on to steal $2.5 million in loans and nine more homes -- including one from a recently widowed, disabled Vietnam veteran and another from a blind, 79-year old woman with Alzheimer's disease.

"It was devastating," said the woman's daughter, Janice Scott-Kittles. "I couldn't believe that somebody could do something like that."

Though agents for Florida's Office of Financial Regulation had the power to stop Johnson anytime, they didn't revoke her license until after a judge had thrown her in jail.

Time and again, regulators caught mortgage professionals breaking the law -- fraud, forgery, and stealing from clients -- but allowed them to stay in the business with few consequences during the richest housing boom in state history, The Miami Herald found.

In fact, as Florida's rate of mortgage fraud rose to the highest in the nation over the past eight years, the number of licenses revoked by state regulators declined each year -- a key measure of a regulatory agency's vigilance.

COMPLAINTS IGNORED

While Florida regulators failed to weed out former criminals entering the industry, the newspaper found the state's system for monitoring scam operations and disciplining crooked brokers also failed .

Complaints to the Office of Financial Regulation -- the state agency created to police the industry -- were routinely ignored, leaving consumers to fend for themselves, according to public records and interviews.

Among those dismissed: 10 complaints against a notorious Broward brokerage whose president eventually pled guilty to $21 million worth of mortgage fraud.

During an eight-month investigation, The Miami Herald analyzed more than 1,400 final orders issued by the agency between 2000 and 2007 and posted on the OFR website, reviewed quarterly reports the agency presented to the Florida cabinet and scrutinized the agency's annual industry newsletters.

The Herald also reviewed thousands of consumer complaints, court files and police reports.

Read the entire 3 part investigative series @ http://www.miamiherald.com/multimedia/news/mortgage/probe.html

[democrat in Tallahassee]

1. Your headline looks like you are referring to FSU (Florida State)

Maybe it would be better to just say "Florida" and yes, the whole state is run by crooks put in office by JEB!

[hedgehog]

2. New Yorkers mus tbe wimps; we demand our "nanny state"

protect us from con artists. In Florida, it's survival of the fittest!