Mortgage Executives Sentenced in $3 Billion Fraud Ring

Two executives from Taylor, Bean & Whitaker Mortgage Corp, formerly one of the country's largest privately held mortgage lending companies were sentenced to several years in prison for their involvement in an estimated $3 billion mortgage fraud ring. Former president Raymond Bowman, and former treasure Desiree Brown were convicted for their roles in trying to hide major company losses by transferring money between accounts at Colonial Bank and selling bogus mortgage loans that either were previously sold or never existed. Bowman was sentenced to 30 months in prison while Brown was sentenced to 6 years in prison. Former chairman Lee Farkas who prosecutors named the ring leader of the fraud is set to be sentenced June 27.

According to prosecutors the mortgage fraud ring lasted more than 7 years until August 09 which caused the collapse of Taylor, Bean, & Whitaker mortgage corp and Colonial BancGroup Inc.'s Colonial Bank.

While it seems that the government is starting to make those at fault pay, their are still much bigger fish to fry.

Mortgage Rates Keep Dropping

For the 8th consecutive week fixed and adjustable rate mortgages have continued to drop to a new yearly low. Rates for a 30 years fixed-rate mortgage dropped from an average of 4.55 percent last week to 4.49 percent this week, as opposed to last years average at this time of 4.72 percent. 5 year adjustable-rate mortgage rates have dropped from an average 3.41 percent last week to 3.28 percent this week. This time last year 5 year ARM averaged 3.92 percent.

With mortgage rates dropping every week it would seem that the market should be flooded with new buyers, just waiting to take advantage of the low rates and cheap property. Not exactly. Even with the low rates its not guaranteed that you will be approved for a loan. It has become harder than ever to secure financing and the banks are making it as difficult as possible to get a loan. Due to their mismanagement of funds and blatant disregard for current and future homeowners, we are now looking at a market where if you don't have cash or perfect credit you are swimming upstream.