[Bruce]

Two and a Half Men was one of my favorite shows. I got the DVD series and watched every single DVD. However, having such a young kid like Angus T. Jones play Jake Harper probably emotionally damaged Angus T. Jones. I disagree with the foul-mouth language they used as well as the sex scenes Angus T. Jones had to confront and act in.

[Bruce]

What factors besides Trump’s criticism influence market volatility?

[Bruce]

Can you quantify the volatility increase during these periods?

[Bruce]

Estimating the precise rise in market volatility due to President Trump’s Criticism of Federal Reserve Chair Jerome Powell requires some considerations:

VIX Index (CBOE Volatility Index):

The VIX, known as the “fear index,” is the market’s estimation of imminent volatility captured through S&P 500 stocks and options. Let’s say you want to measure volatility for an average resident:

Baseline VIX:

• Without substantial political drama and uncertainty surrounding a country’s economic policies, the VIX level could be between 12 and 20.

During Criticism:

• From available information, during the time Trump blasted the Fed or during other major controversies, the VIX would be as follows:

Short-term spikes:

• The Volatility Index saw a significant upward shift of 5 to 10 points within the range of days.
• One example is the spike from 17 to above 36 after Trump’s tweets criticizing Powell towards the end of 2018.

Sustained Increase:

• During constant Criticism, the VIX would remain elevated or increase by 20% to 50% of its standing level.

Implied Volatility of Options: Options Volatility:

Implied and Historical Volatility:

• Indicators suggest that options on major indices like the S&P 500 or individual stocks tend to experience higher implied volatility during these periods.

Volatility in Market Pricing:

• The price of options contracts is expected to increase by 10 percent to 30 percent, or, in some cases, greater than 30 percent for at-the-money options.

Day-to-Day Changes in Stock Prices:

Average True Range (ATR):

• ATR is a technical measure of volatility in the market.

Observed Data:

• During external periods of Fed scrutiny, ATR for the S&P 500 might indeed rise:

Moderate Periods:

• ATR could be around 20 – 30 points.

While Facing Criticism:

• ATR could spike to 40 – 60 points or greater, implying a surge in daily volatility of nearly 50 percent to 100 percent.

Statistical Measures:

Standard Deviation:

• The daily returns of the S&P 500 or any other index give a standard measure of volatility.

Common Volatility:

• Daily returns would have a standard deviation of 0.8 percent to 1.2 percent during a normal period.

Increased Volatility:

• While Trump criticized the Fed, this could increase 30 to 60 percent, bringing the standard deviation from 1.5 percent to 2.0 percent.

The beta of Stocks:

Market Beta:

• Stocks or ETFs that trend with the market’s movement will likely increase their beta.

Ordinary Beta:

• Approximately 1 for the S&P 500.
• During Criticism, Betas may increase, with some stocks or sectors rising 0.1 to 0.5 points, indicating greater volatility in market movements.

Trading Volume:

Volume Spikes:

• Throughout periods of uncertainty, it is not uncommon for trading volume to increase substantially.

Normal Volume:

• The average trading volume of high-ranking indices could be hundreds of millions.

During Criticism:

• When Trump criticizes the Fed, volumes are estimated to increase by a factor of two to three, suggesting sustained market volatility and activity.
• These figures are rough approximations and assume a set scenario.
• The context within which one critique, the economic context, and other contemporaneous factors tend to dictate the actual spike in volatility.
• Nonetheless, these metrics present a means to sketch a picture of flexible outlines on how markets would operate:

Regarding market volatility, short-term measures would range from a surge of 20% to 50% to more than that when looking at implied volatility measures such as VIX.

For longer-term assets needing to rely on sustained or patterned Criticism, volatility would persist at an increase of 10% to 30% from baseline levels.

Remember, these are rough approximations, and market movements can be affected by numerous factors; alongside Trump’s criticism, the release of economic data, global happenings, market sentiment, and many other elements also play a role.

[Bruce]

Analyze the impact of Trump’s criticism of Powell on market volatility.

[Bruce]

GCA Forums News—Monday, April 21st, 2025

Catastrophic Unrest in the Economy

Today’s news reports that the widening chaos caused by the Russia-Ukraine conflict and Trump’s 2020 Trade Wars has led to Trump’s rants regarding the Federal Reserve Bank. He targeted Jerome B. Powell directly along with the Federal Reserve Board. The exposure tensions led to the US Financial Market Chaos.

Chaos In Domestic Politics

Trump’s tirades against Powell have intensified in the domestic public sphere. He suggests that Powell should publicly resign if he does not align with the statutory Trump-appointed monetary policy and demands substantial alignment between Powell’s decisions and the Trump Policy.

Lawsuits on Sanctuary Policies

The Department of Justice has initiated legal action against the City of Chicago and the State of Illinois for their policies on sanctuary cities, claiming that these areas are obstructing apprehensions relating to immigration enforcement at the federal level. Chicago’s Mayor Brandon Johnson and Illinois’s Pritzker have both supported their policies, with Chicago’s Mayor branding the federal moves as politically motivated.

Legal Pursuit of Letitia James

Letitia James, Attorney General of New York State, is facing allegations regarding mortgage fraud connected to declaration documents of properties. James dismissed the allegations, arguing that they were untrue and rooted in her political opponents.

Real Estate Sector with Special Focus on Housing Demand

Mortgages

Prospective homeowners face hurdles due to limited housing availability and slightly higher mortgage rates. Currently, the average 30-year fixed rate hovers at 7.8%.

Market Volatility

The housing market volatility remains affected by fluctuating interest rates, economic uncertainties, and mortgage price uncertainty.

Automotive Industry Updates

Industry Impacts

Like any other industry, the automotive industry is characterized by a volatile mixed signal. For instance, while segments reserved for electric cars record mounting sales, older vehicles like trucks and SUVs face sluggish sales, explosive inventories, and deteriorating market demand.

Fleet Vehicle Sales

Sales of commercial vehicles and fleet vehicles have remained robust due to business spending and infrastructure work. However, providing services is still hampered by supply chain issues affecting delivery schedules.

The Death of Pope Francis

Pope Francis, the first Latin American Pope, died on April 21stEaster Monday, April 21st, 2025, at the age of 88 due to health contingencies. He passed away in his residence, the Vatican Casa Santa Marta. As Pope, he tried to modernize the Church and sought action on climate change and other global challenges.

Economic Indicators

Inflation and GP

The latest analysis indicates that President Trump’s trade policies could lower GDP by 6% in the long run and wages by 5%. This creates a new layer of deep recession risk.

Unemployment Trends

Unemployment is forecasted to increase modestly, with some projections suggesting it will reach 5 percent by early 2026. This increase is due to a combination of trade policies and economic restructuring.

Federal Reserve Perspective

Policy Approach:

Under Chair Powell, the Fed has been very conservative, citing the need for greater clarity from incoming data because of economic uncertainty. Even with political tensions, the Fed has not lost sight of its dual approach of maximum employment and price stability.

DEI Initiatives In Flux

Here are some examples of the biggest companies scaling back on their diversity, equity, and inclusion (DEI) programs, which have recently come under fire. This is part of a broader legal and political conflict concerning DEI programs in the workplace.

All these events highlight how policy decisions in one jurisdiction affect political, economic, and financial dominoes elsewhere. In this country, there is a need for all hands on deck to deal with the issue.

https://www.youtube.com/watch?v=2OXpqydylTA

[Bruce]

Analysis of the Criminal Mortgage Fraud Referral Of Letitia James

On April 14, 2025, the FHFA Director William J. Pulte issued a criminal referral to the U.S. Department of Justice, alleging New York Attorney General Letitia James committed mortgage fraud involving properties in Norfolk, Virginia, and Brooklyn, New York.

• In today’s GCA Forums News Weekend Edition, we will cover the criminal referral and its meaning for Letitia James, its severity, the possibility of an arrest or indictment occurring, the mortgage fraud definition and its prevalence, as well as penalties typically associated with the crime and its common offenders.
• As of April 20, 2025, no charges have been brought against Attorney General James, and the allegations remain unproven.
• The following presents an in-depth analysis tailored to GCA Forums Headline News.
• The analysis integrates insights for prospective homebuyers, investors, and mortgage industry professionals.

What is a Criminal Referral, and How Does It Work?

Criminal Referral Definition:

• A criminal referral is an accusation by a specific agency or an individual asking an established law enforcement body to investigate the possibility of a crime being committed.
• This refers to an entity that possesses information about the illegal activity that has been conducted.
• An example is when the FHFA, which supervises Fannie Mae, Freddie Mac, and the other Federal Home Loan Banks, referred Letitia James’s mortgage fraud allegations to the DOJ, claiming she should be prosecuted.

Steps on How a Criminal Referral Works:

• The FHFA agency or a branch like its Office of Inspector General (OIG) looks over documents and tries to gauge whether a criminal element is involved.
• For James, allegedly, the FHFA provided records to support mortgage application misrepresentation, including declaring primary residence as a Virginia property and misrepresenting a Brooklyn property’s number of units as low single digits.
• Andino summary partial forensics cashed eight hundred thousand dollars in unoppressed audit funds.
• The proposed letter went unpaid.
• The allegations were first brought to the public’s attention by forensic accountant Sam E. Antar, who was blogging on white-collar Fraud.

Submission to the DOJ:

• The referring agency submits a letter or report to the DOJ indicating the allegations and supporting evidence.
• FHFA Director Pulte’s letter to U.S. Attorney General Pam Bondi and Deputy Attorney General Todd Blanche detailed claims of (1) a misrepresentation of a Norfolk, Virginia property as James’s primary residence for the year 2023, (2) a Brooklyn property misclassified from a five-unit building into a four-unit building, and (3) a listing of her father as her husband in the two mortgage documents signed in 1983 and 2000.

As the FHFA cited, referral submissions may include supporting material such as mortgage contracts, Fannie Mae/Freddie Mac documents, and property documents.

DOJ Review:

• A DOJ division, usually through a U.S. Attorney’s Office or a specialized unit, like the Fraud Section, investigates the referral to determine whether the outlined evidence is compelling enough to warrant action.
• Some considerations include holistic evidence, the importance of the alleged falsehoods, and territorial jurisdiction boundaries.
• The FHFA may need to provide further information upon request from the DOJ and may also carry out its independent investigations, such as witness interviews or record reviews via subpoena.

Investigation:

• Suppose the Department of Justice (DOJ) moves forward.
• In that case, the Federal Bureau of Investigation (FBI) or another agency can investigate matters such as intent, financial scope, and damage to lenders.
• For James, this might mean checking whether claims of residency or property are inaccurately described.

Decide to Prosecute:

• Based on each probe, the DOJ calculates whether to charge, seek a civil suit, or abandon prosecution.
• Criminal charges may also lead to a grand jury indictment.
• If the referral declines, the referral could be closed, or the case could be passed off to some state authority or dealt with in a noncriminal manner (like being sued by the lenders).

Outcome:

• It ranges from criminal prosecution to doing nothing at all.
• The FHFA referring to the DOJ does not mean the prosecution will follow.
• This is because there is discretion regarding whether or not to pursue charges, depending on evidence and priorities.
• Other members of the Judicial Branch set forth the formulation procedure, such as the OIG policies and the Inspector General Act of 78, which compels reporting of Fraud involving regulated entities like Fannie Mae.
• FHFA-OIG encourages reporting on the abuse of power, remiss behavior, or Fraud while safeguarding the whistleblower’s identity, revealing only upon compelling investigatory or judicial mandates.

How Serious is a Criminal Referral?

General Seriousness

• A criminal referral is serious because it shows an agency believes that the DOJ might take legal action based on the evidence provided.
• It also depends on the:

Nature of Allegations:

• Mortgage fraud, which has been alleged against James, is a white-collar crime prosecuted under statutes like 18 U.S.C. § 1014 (false statements to a financial institution), 18 U.S.C. § 1341 (mail fraud), 18 U.S.C. § 1343 (wire fraud), and 18 U.S.C. § 1344 (bank fraud).
• These carry prison sentences of up to 7-30 years and fines reaching a million dollars, proving their severe nature.

Evidence Strength:

• The FHFA’s referral cites specific documents, like the 2023 power of attorney and mortgages, which are, according to legal experts, “pretty straightforward” compared to subjective valuation disputes.

Public Profile:

• James’s New York Attorney General profile boosts attention because she prosecutes headlines like the $454 civil lawsuit over Trump’s fraud.
• Allegations concerning a public figure raise ethical and political questions.

Political Context:

• The referral’s timing, led by a Trump-appointed FHFA Director, has ignited accusations of political payback, which would affect its legitimacy.
• James’s office labeled it “baseless” and a “revenge tour.”

Specific To Letitia James

The referral against James is serious due to the following:

Multiple Allegations:

• The pattern of behavior stems from three allegations (residency misrepresentation, property misclassification, and former spouse listing), some of which were beyond the statute of limitations (10 years under the Fraud Enforcement and Recovery Act, 2009) from 1983 to 2000.

Financial Incentives:

• Savings in the primary dwellings for Unit count misrepresentation or primary residence unit count would attain lower interest rates of 25–100 basis points less, or save thousands annually, and qualify for programs like HAMP.

Legal Precedents:

• Public officials charged with/found guilty of false statements (regardless of outcome), declaratory judgment publicly are subject to prosecution without examination of the circumstances, precedent bad cases exist,i.e., ex-Baltimore State’s attorney Marilyn Mosby, mortgage fraud 2024 conviction.

Political Fallout:

• Legal exposure aside, it does not simply constitute undue humiliation that James would suffer.
• She would expose herself to opposition damage and scrutiny concerning her 2026 re-election bid.
• If Virginia’s residency muckles, NY law would allow her office to be considered “vacated.”

On The Contrary, The Referral Being Less Serious Is Due To:

Lack Of Charge Filings:

• No indictment, no conviction as an issued referral. The DOJ could have an absence of evidence, and further, politically motivated reluctance could exist in pursuing.

Defenses:

• James’s office included the mortgage rider and lender waiver for the Virginia property, which implies conflicting gaps regarding the residency ordinances.
• The discrepancy in the unit count for Brooklyn may depend on conflicting documents.

Burden of Proof:

• Prosecutors have the burden to prove intent to defraud and do so without a reasonable doubt, which can be difficult in cases where any misrepresentation was unintentional or of no consequential significance.
• Former prosecutor Neama Rahmani claimed the possibility of the allegation being “mortgage fraud” stems from the way the loans were structured.
• However, attorney Nicole Brenecki points out that the political ramifications of the action, in the absence of financial injury, outweigh any such legal considerations.

Does a Criminal Referral Mean Letitia James Will Be Arrested and Indicted?

• Judging from a criminal referral does not mean that James would be arrested or indicted.
• This is the reason why:

Likelihood of Arrest

Arrest Requires Charges:

• It is generally accepted that an arrest comes after a person has been indicted or if a criminal complaint has been filed.
• Regarding coming up with a compliant mortgage application, the DOJ has not provided such a complaint.
• Non-violent white-collar crimes like mortgage fraud typically do not warrant an immediate arrest.
• In such cases, the suspect must be either a flight risk or putting others in imminent danger, which does not apply to sitting attorneys general with public visibility, such as James.

DOJ Discretion:

• The DOJ is more likely to spend time investigating pieces of a case where incontrovertible evidence exists and substantial injury has been caused.
• Politics James is suing Trump, and the timing of the referral would make any decisions bound by the perception of taking advantage of James and the chances of bias being cold.

Current Status:

• As of April 20, 2025, U.S. Attorney General Pam Bondi confirmed to The Times News that she is reviewing the referral, but no investigation or charges have been announced.

Likelihood of Indictment

Factors of Indictment:

Evidence Strength:

• Documents such as the 2023 power of attorney and Brooklyn Certificate of Occupancy furnish objective evidence, but proving intent and materiality (e.g., if misrepresentations impacted lenders) is more difficult.

Legal Problems:

• The 1983 and 2000 husband-wife claims are most likely time-barred under the 10-year statute of limitations, diminishing their prosecutorial value.
• The 2011 HAMP application may also time out unless linked with ongoing fraudulent activities.

Political Caution:

• Prosecuting a high-profile Democrat in a Trump presidency would invite accusations of abuse of power, as claimed by James’s office, the DOJ’s weaponization of the DOJ.

Estimated Outcomes:

• Analysts believe chances are low to moderate as an indictment awaits unless compelling evidence of intentional deceit with great losses to lenders comes to light.
• Noncriminal charges outnumber the criminal charges, and civil penalties, such as repayment of loans or fines, are expected.

Past examples:

• This Mosby situation involves someone who misrepresented her finances and used them to benefit herself through transactions, leading to her conviction in 2024.
• Even so, she served only 12 months of home confinement instead of prison due to public service.
• I suspect James, if prosecuted, will follow that trend.
• An arrest is improbable without an indictment, and obtaining an indictment is doubtful due to the need for strong evidence and political factors.

The DOJ may conduct a probe, albeit quietly, while James’s mortgage rider defense and the absence of lender affliction minimize his risk of facing criminal repercussions, at least in the short term. He faces no immediate damages, but political and reputational damages remain.

Is Mortgage Fraud Common?

Prevalence

• Mortgage fraud is a growing concern within the context of the U.S. housing market.
• However, its exact scope is harder to gauge because of underreporting and the lack of a universal definition.
• Other important metrics include –

Industry Estimates:

• According to CoreLogic’s 2024 report cited by Investopedia, 1 in 123 mortgage applications contained signs of Fraud, an increase of 8% compared to the previous year.

Suspicious Activity Reports (SARs):

• The Financial Crimes Enforcement Network (FinCEN) captured depository institutions filing 82,851 SARs for suspicious mortgage fraud activities from 1996 to 2006, which accounted for 3.57% of all SAR submissions.
• Recent filings are believed to follow the same trend owing to economic volatility alongside increasing home values.

FBI Insights:

• The FBI states that mortgage fraud occurs more frequently in rapidly appreciating markets.
• Fraudsters exploit inflated values, leading to increased mortgage fraud.
• The financial crisis 2008 highlighted rampant Fraud, resulting in tightened legislation such as the 2009 Fraud Enforcement and Recovery Act (FERA).

Regional Hotspots:

• RealtyTrac’s 2025 foreclosure report states that California, Florida, and Nevada have higher fraud rates because of costly housing markets and investor activity.

Why It’s Common

Lucrative and Accessible:

• The Federal Financial Institutions Examination Council (FFIEC) cites mortgage fraud as “lucrative and relatively easy to perpetrate,” particularly in active markets.

Complex Transactions:

• The involvement of multiple parties (borrowers, lenders, appraisers, brokers) increases the chances of misrepresentation, which makes mortgages complex.

Economic Pressures:

• Increasing interest rates (the 30-year fixed mortgage was 6.85% in April 2025) and the affordability crisis are pushing borrowers and professionals to find shortcuts.
• Although not as widespread as identity theft or credit card fraud, mortgage fraud persists as a problem, particularly those involving industry insiders in fraud-for-profit schemes.

The Elements of Mortgage Fraud

• Widespread lending relies on less stringent controls based on material misstatements, omissions, or misrepresentations made by lenders when approving loan applications.
• It takes two primary forms with various schemes:

Types of Mortgage Fraud

Fraud for Housing:

Definition:

• Borrowers provide false or incomplete information to meet the criteria for a mortgage or a better lending rate, usually to purchase a primary residence.

Examples:

• Claiming renter income instead of rental income from an investment property.
• Miscasting employment status, debt obligations, and assets like a mortgage to be less than they are.
• The dwelling was presented as a primary residence.
• Still, as alleged in James’s Virginia case, it was essentially an investment or rental property.

For Favorable Rates

Definition:

• Property insiders, such as brokers and appraisers, inflate the value of certain properties to obtain a cash payout or access lending equity.
• Inflating appraisals to qualify for larger loans.
• Using straw parties to hide the true borrower.
• Air loan schemes are implemented by fabricating borrowers or properties that are said to be up for loan.

People Perpetuating Fraud:

• Business insiders are paid for the appraisal.
• This type of Fraud involves multiple transactions implying some form of gain, be it direct cash payout or working under the assumption of equity for gain at a later date.

Common Schemes

• Manipulating property value to gain appraisal, such as increasing the loan amount or enabling flips.
• We also have under-appreciated small properties being purchased by investors.

Collateralized mortgage-backed securities:

• Buying cheap properties, lying about the valuation, and quick reselling is known as flipping the property.
• It can be colluded with other known perpetrators as insiders selling and reselling to themselves.
• Homeowners stuck in properties tend to auction their deeds while hoping to rescue perceived value from foreclosure scams.

Multifamily Properties Fraud:

• Misrepresentation to inflate the claimed count and revenue return from the property is erroneously insecure, as for the unit assets described in Brooklyn, which James claimed.
• Creating air loans with no such borrowers or properties, said without evidence.

Occupancy Fraud.

• James Virginia’s allegations showed that misrepresenting primary residency as an investment was deceptively termed for lower rates.
• It enables occupancy and offers fictitious, deceiving claims rather than entitlements.
• Hence, it is termed loan modification and collecting fees.

Home Equity Loan Fraud:

• Using stolen identities to gain access to home equity lines of credit.

Letitia James Case Statistics

• James’s case has both fraud-for-housing and fraud-for-profit components.

Norfolk, Virginia (2023):

• Allegedly claiming the property as her primary residence to benefit from lower rates (25-50 basis points lower), occupancy fraud.

Brooklyn, New York (2001-present):

• A five-unit property was captured as a four-unit property, allowing the owners to qualify for conforming loans, HAMP assistance, and multifamily Fraud.

Husband-Wife Listing (1983, 2000):

• She rented a property to her father as a husband, perhaps to bolster loans.
• Still, it is probably barred because of the time elapsed.
• While these tactics often accompany fraud schemes, they are insignificant in the circumstances surrounding James’s position in public office and the political environment.
• Mortgage fraud is a crime prosecuted under federal and state laws.
• It carries severe penalties because of its implications for financial entities and the housing sector.
• As the range of schemes expands, the losses attributed and roles assumed by defendants also come into play.

Federal Penalties

Some key statutes include,

• False Statements – 18 U.S.C. § 1014: For every false statement with federally insured institutions, up to 30 years in prison and $1 million in fines per count.
• Mail Fraud – 18 U.S.C. § 1341: Offenders are imprisoned for 7 years and pay fines of 250,000 or 1 million if a business is involved.

Federal Penalties

• 18 U.S. § 1343 (Wire fraud): Same as mail fraud
• 18 U.S. § 1344 (Bank Fraud): Up to 7 years in prison and $1 million in fines.
• 18 U.S. § 1349 (Conspiracy): Up to 7 years in prison, this applies to multi-party schemes.

Other penalties:

Restitution:

• Courts may compel repayment to victims (e.g., lenders or FHA), like in 2024, where defendants paid $486,484 in repayments on debts incurred for the losses suffered on FHA-insured loans.

Forfeiture:

• Fraudulent assets may be seized.

Civil penalties:

• Losses incurred by lenders from the issuance of mortgages may warrant legal action for damages.
• Furthermore, regulators may also issue fines or revoke licenses.

Collateral Damage:

• A loss of conviction could lead to reduced credit score, job loss, and suspended professional licenses.

State Penalties

• In New York, mortgage fraud becomes a felony if the losses exceed $1,000, attracting up to 7 years in prison under Penal Law § 187.00.
• Lesser offenses may attract a fine or Probation.

Imprisonment versus Probation

Determine these factors to decide if a defendant will receive Probation.

The severity of the Fraud:

• Large-scale profit-driven frauds, like this year’s $55 million conspiracy, result in prison time, which is 2-7 years for the main participants.

Role of The Defendant:

• Perpetrators will incur harsher penalties than more recent players.
• Emotional first-time offenders or borrowers in fraud-for-housing cases are more likely to get Probation.

Loss Amount:

• Sentencing escalates with “intended loss,” which prosecutors tend to overstate.
• Defense attorneys challenge valuations to lessen the impact of the penalties.

Plea Agreements:

• In most cases (90 %+), the resolution comes in plea bargains, which tend to lessen the sentences issued.
• In a 2024 case, a defendant ended up with a sentence of 6 months’ Probation after pleading guilty.

Mitigating Factors:

• Factors such as voluntary public service, having no previous convictions, or causing little harm can result in Probation or confinement, like Mosby’s case (12 months home confinement).

Examples:

Prison:

• In a conspiracy case that San Francisco investigated in 2024 concerning $55 million of fraudulent loans, guilty pleas were received, and other associated sentences were expected.
• All other sentences were expected to be between 2 and 5 years.

Fines:

• In a Baltimore fraud case, a Canadian defendant’s loss amount dropped from $1.5 million to $180,000, obtaining Probation and a transfer torsion.

James’s Case:

• If he is prosecuted, his public profile and defenses suggest he could only receive Probation or fines for prison time, especially if minimal losses are documented.
• He has, however, not been charged yet.

Who Generally Commits Mortgage Fraud?

• Also referred to as accounting fraud, this crime has many faces, including some borrowers, people working within the mortgage industry, and even public officials occasionally.
• These people can include, but are not limited to:

Borrowers:

• Profile: Home buyers or people looking to refinance who want more favorable terms for the loan.
• Schemes: Over-inflating income, misrepresenting employment (think James claiming occupancy in Virginia), or using straw purchasers.
• Prevalence: A common occurrence in fraud-for-housing, particularly prevalent in first-time buyers or those with bad credit.
• According to CoreLogic, 2024 data estimates that Fraud occurs in 1% of applications.
• Example: To access an FHA loan, a borrower submitted pay stubs that do not represent their actual earnings.

Loan Officers:

• Profile: These mortgage brokers or lenders focus on closing businesses and earning commissions.
• Schemes: Filing forged documents (bank statements, divorce papers) or instructing borrowers to lie as part of a larger scheme.
• Prevalence: High in fraud-for-profit, where 42% of SARs reported broker collusion.

Example: A loan officer raises self-reported income figures to qualify the client for a $500,000 loan.

Real Estate Agents/Brokers:

• Profile: Real estate agents looking for a bigger commission.
• Schemes: Commissions for orchestrating appraisal fraud, property flipping, foreclosure scams, and some for referring clients to con brokers. For example, agents earned 590,000 dollars in commissions from a 2024 case.
• Prevalence: Notable in flipping and REO fraud, especially in hot markets.

Example: One partner, an agent, colludes with an appraiser to overvalue the cost of a flipped property before its resale.

Appraisers:

• Profile: A licensed appraiser who alters the property value.
• Schemes: Over- and under-valuing properties by large margins on loans based on purchase type.
• The Appraisal Institute states that appraisal dealers face strong contention from brokers to have property values set too high.
• Prevalence: Fraud for profit estimates 30% of schemes with appraisers involved, indicating covertness by proxy is largely depraved without oversight.
• An example is an appraiser lying about the comparable sales for a property to validate his fraudulent $1 million valuation.

Other People:

• Definition: Closing agents, title officers, and credit counselors.
• Actions include falsifying title documents, embezzling escrow funds, or manipulating records to show an inflated credit score.

Impact: While these scenarios may not be common, they demonstrate significant risk in sophisticated schemes.

Example: A title agent establishes a fictitious title chain to support a non-existent loan.

James’s Case

In this case, the wrongdoing by James, a government official, claimed plausibly, is that he removed imputations of property as if the official claimed a primary home for a ‘service’ residence that purportedly looked after under James’s supervision.

https://www.youtube.com/watch?v=UIyhInWHxyg

[Bruce]

As of April 9, 2025, the information in this summary has been crafted as promised. It aims to reflect the latest advancements in the field. It focuses on the career opportunities for a Dually Licensed Realtor and Mortgage Loan Originator (MLO), often set up as a Business Development Manager (BDM) program. Under this model, a real estate agent gets into business with an NMLS-licensed loan officer, allowing them to earn real estate and mortgage loan origination commissions on a single transaction.

Definition of a Dually Licensed Realtor and MLO BDM Program

With the added authority of an NMLS license, the realtor can now work with a seasoned mortgage loan originator and maximize earnings through the Dually Licensed Realtor and MLO Business Development Manager Program. This enables the licensed real estate agent to expand their career opportunities. Under this model, real estate agents still receive their standard commission when representing homebuyers. Still, they also earn a share of the mortgage loan origination commission when assisting the buyer in financing the property. Usually, the accompanying MLO does most of the mortgage work, allowing the real estate agent to concentrate on real estate to earn a commission on the loan side of the deal, too.

This approach perfectly fits the housing market, in which professionals want to maximize earnings. Such programs create a simple, one-stop-shop experience for clients. Gustan Cho Associates, NEXA Mortgage, and others use these programs, which brand their services as “Preferred Realtor Partner Networks” or some form of it.

How Does It Work?

Licensing Requirement:

• To participate, the real estate agent must obtain an NMLS license in one state, at least where they intend to work.
• It requires completing 20 hours of NMLS pre-licensed education classes, passing the SAFE Mortgage Loan Originator Test with at least 75%, undergoing a background check, and obtaining sponsorship from an NMLS-licensed mortgage company.
• The process is expected to cost between $300 and $500, covering exam fees, background checks, and state licensing fees.
• This, however, varies from state to state.
• Upon acquiring the license, the real estate agent is now a dually licensed professional with a real estate and an MLO license.

Partnership Structure:

The realtor partners with a seasoned NMLS-licensed loan officer. This loan officer is typically provided by the sponsoring mortgage company (which could be a lender or broker like NEXA Mortgage). Often, the agent selects the partner based on how the agent’s reputation and experience align with theirs.

The loan officer partner assumed the lead responsibility for originating and processing the mortgage loan, including activities like accepting the loan application, locking the interest, coordinating with the underwriters, and servicing the loan from application to closing.

Role of the Realtor:

• The realtor’s main focus becomes representing the homebuyer when locating and buying a home.
• The agent receives their real estate commission, usually at 2.5-3% of the home’s sale price, based on market conditions or the agreement reached.
• The agent’s contribution to mortgages is usually the least amount of work required, yet it is essential.
• They may bring the loan officer to the client, give the client basic details of the loan programs, such as fixed-rate loans, FHA loans, and VA loans, and estimate rates and lock terms.
• The rest is handled by the MLO in terms of contractual and operational elements.

Compensation:

• The real estate agent earns all the real estate commissions as the buyer’s agent.
• Furthermore, they also receive a part of the mortgage loan origination commission.
• This is usually a percentage of the loan amount, usually 0.5%—1% or more, depending on the company’s payout structure.
• For instance, the total commission on a $300,000 loan with a 1% origination fee would be $3,000, and the agent would half this with the partnering MLO (i.e., $1,500 each).
• The exact split may vary by program. Still, it incentivizes the real estate agent without requiring full loan origination work.

Support and Resources:

The sponsoring mortgage company typically provides training, guarantees some leads, and provides in-house operational support, such as loan processors and underwriting teams, to keep the partnership efficient. This lets the real estate agent use the lender’s infrastructure without the need for extensive mortgage knowledge.

Advantages of the Program

Higher Income:

• Agents who earn from both the real estate and mortgage sides stand to gain more revenue per commission transaction.
• For example, an agent receives $13,200 as a total commission from a $400,000 home sale and a $320,000 loan with a 0.75% origination fee.
• Homebuyer Benefit:
• Coordinating home purchases and financing makes it easier for professionals to streamline the processes.
• A trusted mortgage loan officer (MLO) can help executive the client’s home-buying dream.

Willingness:

• The agent can take a break and depend on their MLO partner to handle the heavy lifting.

Client Attraction:

Clients who appreciate full service would gravitate towards agents who are dually licensed, therefore allowing the agent to stand out in a saturated market.

Challenges and Considerations

Time for Licensing:

• Acquiring the NMLS license is time-consuming and expensive for independent contractors, even though one state does not pose an extra challenge for additional licenses.

Regulatory Compliance:

• Professionals with dual licenses are bound by the specific guidelines of the Real Estate Settlement Procedures Act (RESPA) and the SAFE Act.
• As an illustration, some such dual-role realtors and MLOs may not serve the same client on FHA loans, although this restriction was relaxed in 2023 for select transactions.
• All participants in the transaction must be informed of dual roles simultaneously to mitigate ethical dilemmas.

State Variations:

• The criteria for licensing and partnerships differ from one state to another.
• Full dual representation is permitted in some states.
• In contrast, others have more stringent policies (as in the case of secondary mortgage market purchasers who may refuse to accept an agent and MLO loan originator in the same person).

Dependence on Partner:

• The agent’s mortgage earnings are directly proportional to the efficiency of the partnered MLO in successfully closing loans.

Example in Practice

• Consider a real estate agent from California who registers into a BDM program with Gustan Cho Associates.
• They are already licensed with the California DRE.
• For $400, they get NMLS-licensed through the DFPI.
• They then partnered with one veteran MLO from the company’s network.

Scenario:

• An agent assists in purchasing a home for a client at $500,000.
• The agent closes the deal and earns a 3% commission ($15,000).
• The client finances $400,000, and the MLO locks a loan with a 1% origination fee ($4,000).
• Sharing the proceeds equally between the agent and the MLO results in the agent earning an additional $2,000.

Total Earnings:

• $17,000 from one transaction, for which the MLO only has to do the loan paperwork.
• The agent concentrates their efforts on bringing in more real estate clients.
• At the same time, the MLO looks after the financing, which synergizes the two and helps both parties.

Getting Started

Research Programs:

• Check for the availability of BDMs with dual licenses offered by mortgage companies like Gustan Cho Associates’ Preferred Realtor Partner Network, NEXA Mortgage, or Mortgage Lenders for Bad Credit.

Get NMLS License:

• Take the 20-hour pre-licensing course ($100-300). Pay for the SAFE exam ($110, BGC $36.25).
• MA State Filing Fee ($79 with Individual (MU4).
• NY Fee is $379, and Garage register fee296 =$675.

Find a sponsor:

• Work with a mortgage lender/broker that supports dual licensing and has MLO sponsors.
• They will sponsor your NMLS.

Choose a partner:

• Pick MLO for the company’s team based on your choice and market requirements.

Get started earning:

• Advertise your combined skills and seal deals alongside your partner.
• This Dually Licensed Realtor and MLO BDM Program is a beneficial career advancement path for agents seeking to increase revenue streams and serve a wider range of clients.

Real estate agents who acquire an NMLS license and team up with a seasoned loan officer can easily penetrate the mortgage origination market without learning the intricacies of full-blown loan processing. It is a very appealing opportunity in today’s fast-paced real estate market. It requires minimal effort but delivers great results because it capitalizes on pre-existing skills and networks.

Feel free to reach out if you have any questions about certain programs or state prerequisites!

• This reply was modified 2 weeks, 2 days ago by  Bruce.

[Bruce]

I need a comprehensive, detailed overview guide on Lending Network, LLC. The website is https://www.lendingnetwork.org. The managing director is Gustan Cho, NMLS 873293. The parent company of Lending Network, LLC (www.lendingnetwork.org) is Gustan Cho Associates, a DBA of NEXA Mortgage, LLC.

Gustan Cho Associates has a national reputation for being able to do business, commercial, and residential loans that other business, commercial, and residential lenders cannot do. Lending Network, LLC is the largest business and commercial lender in the United States, licensed in 48 states (MA and NY pending), including Washington, DC, Puerto Rico, Guam, and the United States Virgin Islands.

Lending Network, LLC, and its parent company, Gustan Cho Associates, are members of the Better Business Bureau with an A+ rating. The team at Lending Network, LLC is available 7 days a week, including late evenings, weekends and holidays.

https://www.lendingnetwork.org

• This reply was modified 1 month, 1 week ago by  Sapna Sharma.