Four Pennsylvanians and one person from New Jersey were indicted earlier this month for a $14.5 million mortgage fraud scheme that operated from 2004 to 2007. The FBI headed a joint federal-state investigation that led to the indictments.
The scheme promised 35 struggling homeowners that they could save their homes if they allowed a straw purchaser to buy the homes and obtain new mortgages. The homeowners could stay in their homes, make partial mortgage payments, and would receive their homes back in a year.
Instead, the schemers set up phony bankruptcies and mortgages and funneled home equity through shell corporations into their own bank accounts. They targeted homeowners in desperate need of assistance and took full and knowing advantage of that desperation. Among the five indicted are a real-estate lawyer, a bankruptcy attorney, two mortgage brokers, and the wife of one of the mortgage brokers. If convicted, they face millions of dollars in fines and maximum prison sentences that would be the equivalent of multiple life sentences.
This story is another warning to homeowners to be careful before pursuing offers that are too good to be true. Make sure that the professional you work with has a strong reputation and consult with H.U.D. (877-HUD-1515) before proceeding.
