Mortgage Fraud Ring Uncovered

Apr 2nd, 2008 @ 10:26 AM by MortgageMentor

When discussing the nationwide mortgage troubles, most people will tell you that the problem lies with subprime mortgage lenders, coupled with the many homeowners who do not bother to understand the terms of their agreement before signing for a loan. But on Monday, 19 people were reported to have been charged with targeting homeowners who were facing foreclosure and stealing over $12.6 million from them. The victims, 115 of them so far, were scammed by a major mortgage fraud ring that tricked them into turning over the title to their homes. The homeowners, who were all facing foreclosure at the time, believed that the program would save their homes, the equity they had in them, and protect their credit rating.

The homeowners had made an agreement to pay rent to the con artists, who they thought were rescuing them by covering their mortgages. The fraudsters not only obtained the homes, they zeroed out all the remaining equity by taking out more loans against the property. Three of the leaders of the ring were licensed mortgage brokers. The rest were not, but they pretended that they were. They operated out of Southern California, operating as Head Financial Services, with offices also located in Phoenix, Colorado Springs, and Johnstown Pennsylvania. Authorities expect to find more victims as the investigation continues.