The Miami Herald

Probe of broker agency is sought

Saying he's outraged that thousands of people with criminal histories were allowed to peddle home loans in Florida, Attorney General Bill McCollum called for an investigation into the state agency overseeing the mortgage industry.

The attorney general said Monday he wants the state to review the licensing practices of the Office of Financial Regulation and look for ways to stop former criminals from jumping into the mortgage business.

"It is disturbing that ex-felons obtain licenses in positions of trust, then turn around and breach that trust, " McCollum wrote in a letter to top state leaders Monday. "We should find a way to stop this practice."

McCollum's request comes as the Financial Services Commission -- which oversees the mortgage regulatory agency -- meets Tuesday to discuss problems raised in a Miami Herald series showing that racketeers, bank robbers and cocaine traffickers were able to enter the mortgage business.

McCollum is the second state leader to demand an investigation into the embattled agency that oversees an industry with the highest rate of mortgage fraud in the country. Last week, Florida Chief Financial Officer Alex Sink called for a probe and for the resignation of the agency's leader, Commissioner Don Saxon.

SAXON TO BE HEARD

Saxon, who has defended his agency, is expected to address the Financial Services Commission on Tuesday.

While calling for reforms, McCollum stopped short of demanding Saxon's ouster. "At this point, it's not necessary, " said attorney general spokeswoman Sandi Copes, who declined further comment.

Sink and McCollum sit on the four-member commission along with Gov. Charlie Crist and Agriculture Commissioner Charles Bronson. It would take three votes to remove Saxon.

McCollum's request was included in a letter he sent Monday to his fellow panel members. He is also asking for the commission to adopt tougher rules similar to legislation recently passed by Congress that includes a ban on anyone convicted of a felony in the past seven years.

In his letter, McCollum noted, "I am certain you share my concerns about the unacceptable rate of mortgage fraud in our state, and my outrage at the degree in which those with criminal backgrounds are committing fraud in the mortgage industry."

McCollum is also asking for a seven-year ban on ex-felons who seek clemency from entering the mortgage profession.

PAPER'S FINDINGS

The Herald's eight-month investigation showed that from 2000 to 2007 more than 10,000 people with criminal histories were allowed to work in the mortgage business. Thousands were licensed despite having committed crimes the state was specifically required to screen.

Convicted criminals went on to commit at least $85 million in mortgage fraud, the newspaper found.

Neither Bronson nor Crist could be reached late Monday for reaction to McCollum's letter.

Both have refrained from stating a position on the agency or Saxon.

Sink's spokeswoman declined to comment on McCollum's letter but reaffirmed the CFO's call for Saxon to go. Said Tara Klemek: "She firmly believes the Office of Financial Regulation needs new leadership."




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