National Freddie Mac Internet Mortgage Scam Exposed. Nation's First Internet Whistleblower Retal
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Added: 01/02/2004
Type: Summary
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National Freddie Mac Internet Mortgage Scam Exposed. Nation's First Internet Whistleblower Retaliati
Consumers need to know that they may be dealing with companies who are unlicensed and are not authorized to act as a mortgage lender or mortgage broker, says Joseph Alloway who was fired as a “Whistleblower” May 22, 2003 by CEO, Attorney Richard Nacht of Royal Mortgage Corporation in Princeton, NJ.
Royal Mortgage has, as “Whistleblower Alloway” alleges, taken advantage of the Internet's unique capabilities -- by operating various Internet mortgage “instant Freddie Mac approval” websites, and posting Web site information that is readily accessible from anywhere in the world on consumer mortgage sites like Lendingtree.com® and Bankrate.com®.
The U.S. Department of Justice defines “Internet fraud", generally to any type of fraud scheme that uses one or more components of the Internet to transact business, as the saying goes, on "Internet time." Fraudulent Internet mortgage companies operate more quickly using predatory lending practices on the unregulated Internet accepting credit cards to charge fees and lock rates.
In Michigan alone, Royal Mortgage has operated illegally since August 22, 2001 funding 100s of Internet mortgages, says Alloway, the Company’s former Director of Credit Union Services. “They operate from websites at www.bankrate.com, www.membershipmortgage.com, www.royalmortgage.com, www.topproducersmortgage.com, www.lendingtree.com, and www.ecityloans.com by originating, processing, then funding mortgages without a proper Michigan license or lending authority”.
“Royal Mortgage advertises through three Internet “Branded” Websites and Bankrate.com® in Michigan. When I contacted Michigan Regulator Mark Weigold to find out if Membership Mortgage® complied with Michigan law… I was “flustered” according to my CEO, an attorney, when I told him the company was not operating legally”.
“Mr. Weigold told me in April, the company could operate and must fund all mortgages under the name of eCityLoans. I asked Richard Nacht, my CEO if he was funding loans under eCityLoans, and he told me yes. After he told that, I looked further and found he lied, and the company was operating illegally originating and funding mortgages in Michigan. I called the New Jersey Department of Banking and found complaints there too!”
Royal Mortgage is an approved Freddie Mac & Fannie Mae Lender sells mortgages to Washington Mutual, Chase®, Provident and other secondary market lenders. According to an “unnamed source” at HUD, Alloway says the ultimate loss to consumers, and the validity of these mortgages remains in question while consumer mortgages continue to be “sold & sold again on the secondary market”.
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