Florida admits it let crooked mortgage brokers run wild

Miami HeraldSeptember 17, 2008 

TALLAHASSEE — In a stinging critique of the state's oversight of the mortgage industry, top Florida investigators found that state regulators failed to alert police agencies to crooked mortgage brokerages, ignored citizen complaints and allowed hundreds of people with criminal histories to peddle loans.

The report released Tuesday to Gov. Charlie Crist and the Cabinet criticized the Office of Financial Regulation, saying the agency broke down in key areas, including screening brokers and shutting down shoddy operations, while the state grappled with the nation's worst home loan fraud crisis.

The investigation, carried out by the Inspectors General of the State Cabinet Offices, concluded the state's regulatory system was "insufficient to protect the people of the state of Florida.''

The six-week probe was prompted by a Miami Herald series, Borrowers Betrayed, that found sweeping breakdowns in the state enforcement system, including the licensing of thousands of criminals, including money launderers, racketeers and cocaine traffickers.

The Herald's series led to the forced resignation of Commissioner Don Saxon, who had overseen the agency since 2003.

Saxon said last month he hoped the report would vindicate his leadership of the agency. When asked Tuesday if the audit had done so, Crist responded with an abrupt "No.''

Read the full story at MiamiHerald.com.

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