We need only look around to see the obvious damage that the housing bust has done to our community and our state. While it’s true that some home buyers should have been more realistic about what they could afford to purchase, thousands of Floridians did their best to understand the complicated mortgage process, but still found themselves the victims of mortgage fraud. In fact, recent reports put Florida at the bottom of the heap for mortgage scams: According to LexisNexis Risk Solutions’ annual mortgage fraud report, for the fifth consecutive year, Florida has the highest number of all mortgage fraud investigations and the third highest number of investigations for loans originating in 2011. There are plenty of other appalling statistics, too (Florida also topped Mortgage Daily’s first quarter mortgage fraud index), but you get the drift.
Governor Rick Scott took office two years after the largest crisis in the housing and financial sectors that our nation has seen since the Great Depression. So how did he go about addressing homeowners’ pain? His first step was to appoint his wealthy political fund-raising buddy, neighbor, and former State Representative Tom Grady (R-Naples) as Commissioner of Florida’s Office of Financial Regulation (OFR). Grady then submitted a slash-and-burn budget that meant eliminating half of the OFR regional offices, which citizens depend on to fight mortgage fraud. Then Scott and Grady found a spot for another Scott buddy from Naples—this one a chiropractor—by showing the gate to a seasoned OFR division director. Having hobbled the anti-fraud office by eliminating 81 positions, Grady then created an “all-volunteer” advisory council of securities lawyers to serve as a toothless watchdog of the people’s interest. Without the power to regulator, investigate, subpoena, arrest or (in cases involving clients or potential clients), even talk about fraud allegations, it’s hard to see how any of this serves the public interest.
After a short, seven-month stint at OFR, Tom Grady then moved on to a short two-month stint as interim president of state-run Citizens Property Insurance (another entity that should be serving the people of Florida), where he worked to slash costs while simultaneously running up travel expenses that averaged $5000 per month. He has now returned to the private sector. It will be interesting to see his next moves.
To be fair, we have to acknowledge that all of this didn’t happen just because of Governor Rick Scott or Tom Grady. After all, with one-party rule in Tallahassee, it’s only to be expected that the Republican legislature would approve the huge budget cuts that hobbled the Office of Financial Regulation. But to turn Florida around—to make our state shine again—we need zero tolerance for real-life mortgage, Medicaid, and insurance fraud, not just make-believe voter fraud. That’s the direction Florida needs.