Greedy mortgage brokers charged with theft

The Asbury Park Press reported

"Three executives from Hawthorne Capital Corp., a mortgage brokerage with offices in Manalapan, (New Jersey) New York and Pennsylvania, have been charged with theft for failing to pay off original loans after refinancing mortgages, the Monmouth County Prosecutor's Office said."

"New Jersey customers used the company to refinance their mortgages, the Prosecutor's Office said. Typically when that happens, the lender pays off the original mortgages. But the Prosecutor's Office said it received a complaint from a Monmouth County homeowner who said a check sent to her original mortgage company had been returned for insufficient funds after the homeowner refinanced with Hawthorne."

Now, this is interesting because we normally find a title company and/or lawyer involved in the actual disbursement the new mortgage loans, not the mortgage broker. So, we think there’s more here than meets the eye.

Also interesting is the clumsiness in which the broker acted since there doesn't seem to be any attempt to hide the fraud by making a few months' worth of mortgage payments on behalf of the owner.

We’ll try to follow this story.

For your next title order or if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453,
Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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More Monmouth County, NJ residents need flood insurance

Coastal residents of Monmouth County, New Jersey are facing a deadline for the purchase of homeowner's flood insurance.

The Asbury Press is reporting, "On Sept. 25, the Federal Emergency Management Administration's revised flood zone maps for 12 coastal Monmouth County municipalities become permanent."

Flood insurance has long been a staple of life at the Jersey Shore but the revised maps, based on laser technology, expand the "areas that have a 1 percent annual chance of severe flooding."

The impact on Monmouth County residents is substantial.

FEMA'S revised maps have expanded the Bayshore's municipal flood zone areas, adding an estimated 4,300 property owners to the Raritan Bay-Bayshore zone. The new maps, released March 2008, add 1,820 homes in Middletown; 1,810 homes in Keansburg; 640 homes in Hazlet; and 15 homes in Union Beach.

Most homeowners, as a condition of their federally insured mortgage, now will need flood insurance.

Combined, the added policies will cost coastal Monmouth residents hundreds of thousands of dollars.

One planning expert said such mandatory flood insurance will bring, aside from premium payments, other secondary economic costs. "It certainly will result in higher monthly housing costs," said James W. Hughes, Dean of the Edward J. Bloustein School of Public Planning & Policy, Rutgers University. "Even if the(operating) price stays the same, you've got an additional monthly insurance premium that you have to pay."

Not all the news is bad.

Bayshore residents can reduce their initial flood insurance cost, said FEMA executives, by purchasing a "preferred risk policy" before the maps take effect. PRPs are only issued for homes not currently in the flood hazard area.

Property owners are then locked into the policy rated by an insurance agent using a low risk zone upon renewal. The PRP rate remains in effect until the policy's first renewal date.

Flood insurance has long been required for federally related mortgage loans--just about all mortgages written in the United States--since the inception of flood insurance. It's a necessary evil, saving homeowners from many tens of thousands of dollars in out of pocket losses when floods strike.

Read the Asbury Park Press stories, FEMA maps expand zones and Time to buy insurance is now. For more about the go to http://www.floodsmart.gov/floodsmart/

For your next title order,
or if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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