The problem of mortgage fraud is back in the news again. A home builder was accused of conspiring to inflate the prices of half a dozen luxury homes.
At the time, the accused was owner of Horizon Construction. According to the information issued and subsequent indictment, he allegedly worked with others to recruit straw buyers. These individuals were paid to secure mortgages for homes they never intended to live in. The allegations state that none of the straw buyers planned to actually make payments on the mortgages, and obtained them with fraudulent intent.
This scheme, according to prosecutors, resulted in approximately $3.3 million in losses for lenders and six homes going into foreclosure. One of the straw buyers was charged in relation to three of the six homes. Five additional individuals were charged with conspiracy in the indictment, and three of these five were charged with bank fraud as well. One buyer, who bought three of the homes, was charged with an information, the same charge as that of the owner of Horizon Construction. The filing of an information indicates that a defendant has waived the right to have his or her case heard by a grand jury and intends to plead guilty to the government's charges.
This case serves as a reminder of how mortgage fraud hurts communities. It can make lenders wary of providing funds to legitmate buyers. It can also drive lenders out of business, as they are hit by substantial financial losses.
A United States assistant attorney confirmed that the effects are wide-ranging. In a statement, he said that mortgage fraud affects surrounding suburbs, not just the neighborhood where the specific homes were. If you are an investor, broker, or straw buyer facing similar mortgage fraud legal troubles, it is critical to hire a veteran defense lawyer who can provide proper representation in mortgage fraud or real estate fraud cases.
Source: Cleveland.com, "Medina builder of luxury homes, 6 other people accused of mortgage fraud" Mark Gillispie, Jul. 01, 2013