State Busts Fraudulent Brokers
Mortgage scams tend to increase in the slow season when homes become harder to sell.
Jennifer Youssef / The Detroit News
THIS IS A REPUBLISHED ARTICLE SUBMITTED BY MARK MAUPIN

The state's ongoing crackdown against mortgage fraud netted nearly a dozen brokers now permanently banned from doing business in the state. The frauds, many in Metro Detroit, involved equity stripping, bogus "foreclosure rescue" schemes, inflated property values and even cooking up phony loan documents.

Fraudulent brokers are fined, prohibited from working in the industry and may have their licenses revoked, said Kathy Fagan, a public relations officer for the Office of Financial and Insurance Services. Many of those charged with an offense aren't properly licensed. Such offenders are ordered to get licensed and pay a fine of varying amounts.

The state's Office of Financial and Insurance Services in Lansing on Friday released the names and office locations of 11 bad brokers who were charged with any one of the ever-growing mortgage scams. They were:

Ronnie Duke, of Fenton; Joseph Saad, of Dearborn Heights; Ronald L. Ribant, of Southfield; Robert C. Troub, of Portland; Chad E. Willis, of Detroit; Marvin R. Fried, of West Bloomfield; James T. Keyton, of Traverse City; Richard Major, of Grand Rapids; Brian Winborn, of Ypsilanti; Kalil Khalil, of Brownstown Township and Tariq Hamad of Taylor.

Mortgage scams have increased so much that the organization hired seven more examiners in July -- doubling the number of examiners on the staff to regulate the mortgage industry -- and will hire a second attorney to handle mortgage-related cases, Fagan said.

"It's a growing trend," Fagan said. "It's another white collar crime people have caught onto."

Mortgage fraud is a major issue nationwide, Fagan said, and particularly in Michigan, which ranks ninth worst in the nation for these crimes. There are a couple of reasons OFIS officials say Michigan homeowners are targeted; one is the high number of owner-occupied homes, and another is that many homeowners here are elderly and more susceptible to scams.

Fagan encouraged homeowners and mortgage applicants to shop around for a reputable broker, get referrals and review documentation from the mortgage company. Customers should also be wary of unrealistic deals.

"If it sounds too good to be true, it probably is," Fagan said

Scam artists have been around forever, said Steve Hagan, president of the Michigan Mortgage Brokers Association in Ann Arbor and Northwood Financial Services in Bloomfield Hills. However, he noted, they are getting increasingly aggressive as the housing market slides into its slow season.

High season for the real estate industry is from April through July.

"With a downturn in the industry, people are getting more desperate," Hagan said. OFIS has regulated the mortgage industry since 1981. Since then, the number of mortgage companies in the state has grown from zero to about 3,200.

In 2006, Michigan joined other states in settling a national predatory lending case against Ameriquest Mortgage Company, which paid $325 million and was ordered to change its practices; prohibited five people from working in the mortgage business and have six more pending; issued five orders to cease and desist violating the mortgage licensing statutes; have 17 other cases in various stages of the enforcement process and issued 20 consent orders settling cases against mortgage companies.