Real Estate & Property Law
26 Charged in $200 M Mortgage Fraud
Posted Jul 10, 2007 8:57 PM CDT
By Martha Neil
Federal prosecutors in New York City announced today charges against 26 people in an alleged $200 million subprime mortgage scheme that involved 1,000 fraudulent loans.
Participants allegedly cooperated to submit fraudulent mortgage applications between 2004 and 2006, obtaining funding for loans that otherwise would never have been made, reports CNN. Applications reportedly inflated the income of buyers and the value of the properties being sold, among other misinformation.
The article does not explain precisely how alleged participants profited from the fraud. However, in general, common mortgage loan schemes reportedly have involved fraudulent loan applications made to fund purchases of properties from cooperating sellers, often at inflated prices, so that proceeds can then be shared among all participants.
The case was pursued jointly by the Federal Bureau of Investigation, the New York City Police Department and U.S. Immigration and Customs Enforcement. Among those charged are three mortgage loan brokers, according to CNN.