In a million-dollar mortgage fraud case, two well-known attorneys were recently indicted for their role in a mortgage fraud ring.
The indictment was handed down by Eric T. Schneiderman, the State Attorney General of New York. It names the two attorneys, plus an appraiser and two additional individuals and accuses them of operating a mortgage fraud ring for several years. In that time, they acquired a net of over $1 million via fraudulent deals with institutional lenders and first-time home buyers.
According to the indictment, all five defendants advertised rent-to-own ventures that were targeted toward people buying homes for the first time. The ads said that the new homebuyers would be able to buy homes without any down payments and without any closing costs. While these terms would be seen as too good to be true by most people, potential buyers with low credit saw the opportunity as their only chance to own their own home.
Once those buyers signed on, the defendants took out a number of fraudulent loans against the properties up for sale. They did this by persuading institutional lenders that the money would be used to pay off underlying mortgages. However, the loan cash didn’t go to paying off mortgages, and instead went directly into the defendant’s pockets.
The indictment has 19 counts, and was unsealed by the Onondaga County Court. Those counts include Second Degree Residential Mortgage Fraud, Second Degree Grand Larceny, Third Degree Grand Larceny, First Degree Scheme to Defraud, and First Degree Falsifying Business Records.
The defendants have been arraigned and bail has been set. Each of the defendants could face as many as 20 years in prison if they are convicted,
Mortgage fraud legal cases affect people in all areas of the country, including Florida where a significant number of real estate transactions occur every day. Buyers and sellers alike benefit from mortgage fraud cases being pursued successfully.
Source: National Mortgage Professional Magazine, “NY AG Schneiderman Breaks Up Mortgage Fraud Ring” No Author Given, Aug. 29, 2013