Tracking criminals in the mortgage biz -- how Barlett & Steele winners did it

Miami Herald reporters Jack Dolan, Matt Haggman and Rob Barry produced a series called, “Borrowers Betrayed,” in January that “found that the state had licensed over a thousand convicted felons as mortgage brokers and had allowed two thousand felons to work as unlicensed loan originators.” That series won the top gold award and $5,000 in the Reynolds Center’s third annual Barlett & Steele Awards for Investigative Business Journalism this week.

Part One of the series says:

State regulators allowed thousands of ex-convicts to enter a profession that gave them access to the most sensitive and personal financial information: credit cards, bank accounts and Social Security numbers.

Those criminals went on to commit nearly $85 million in mortgage fraud, the newspaper found. They stole their customers' identities. They stole their money. They even stole their homes.

The team’s eight-month investigation started after visiting a mortgage broker. The broker bragged about being able to sell all types of loans, and his backroom call center raised red flags for Jack and Matt.

“We half-jokingly checked his criminal background,” Jack said. The check revealed drug and financial crimes, which led the two to ask: “If he can get a license, who else can?”

That revelation, plus a designation for Florida as the No. 1 state for mortgage fraud, made them want to pursue the story.

"A lot of reporting had been done at the top of the food chain on Wall Street, but we wanted to get to the bottom,” Matt says. “The mortgage-broker people were coming face-to-face with the victims.”

Jack says, “The database [of 222,844 Florida mortgage professionals] was the world’s greatest tip sheet, but it took a tremendous amount of shoe leather.” Some of that leather was worn while tracking convicted bank robbers late at night, they say.

Today’s Tips: Realize that once you have the data, there’s still a lot of reporting to do, Jack and Matt say. Also, make sure all of the reporters on a project can work together as a team.

The trio worked together on the reporting, and each wrote one installment of the three-day series. Each part carried all three bylines.

Tomorrow: How did Barlett & Steele silver award winners Gary Cohn and Darrell Preston of Bloomberg Markets magazine investigate the endorsement fees charged by AARP that resulted in higher insurance costs for seniors?

Tapping Associations

Washington Post reporter Emma Carew’s article about a boost in direct sellers helps readers understand why they may be getting more invitations to such events.

Most of the companies she cites aren’t publicly traded, which means gathering information can sometimes be tricky. To balance her piece, she cites data from the Direct Selling Association.

Today’s Tip: Use associations to help with your reporting.

These groups often track numbers and can give you broader perspectives on what’s happening in some industries. You can search sites such as Weddle's and the American Society of Association Executives to find associations.

$10 Billion in Fraudulent Flips

The Sarasota Herald-Tribune launched a six-day series and interactive online package looking at how flipping houses led to inflated prices and $450 million in defaulted mortgage loans. Using public records to get mortgage filings and deeds, the paper concluded that the fraudulent flip transactions totaled about $10 billion.

Investigative reporter Matthew Doig said the story started when a county property appraiser analysis showed frequent sales of certain properties as well as repeat buyers and sellers. And Michael Braga’s experience covering real estate helped them see the connections between the parties.

“He has a ‘Rain Man’ quality with a memory that serves him well. He knows all the players,” Doig said.

The paper also created its own database of 19 million property sales records dating to January 2000. The paper’s Web site provides details about the reporters’ calculations.

Today’s Tip: Public records searches can shed light on business connections because sometimes companies use several names for various partnerships.

The Florida Division of Corporations’ Sunbiz Web site helped the Herald-Tribune connect the flippers. To get started on your own investigation, check out this toolbox from the Society of Professional Journalists that lists several online options for accessing public records.