Friday, September 16, 2005

Mortgage Fraud Doesn't End

In another sure sign that the housing bubble has skewed the real estate and mortgage market, here's another case of real estate brokers engaging in fraudulent activities to qualify borrowers for loans for which they are wild unqualified.  Indeed, some of the borrowers were illegal aliens.  According to a press release (here) issued by the U.S. Attorney's Office for the District of Colorado:

[B]etween July 2000, and November 2002, the defendants operated and/or worked at the Mendez Team real estate agency in Lakewood, Colorado. WILLIAM MENDEZ and CLAUDIA MENDEZ, and others who have been indicted previously, assisted home buyers, whom they knew to be illegal aliens or otherwise unqualified to obtain loans backed by FHA mortgage insurance, in preparing and completing loan applications containing false information.  In the process, BENEDICTA GOMEZ prepared false tax returns designed to allow the home buyers to obtain loans backed by FHA mortgage insurance.

Once the fraudulent applications and false documents were prepared, the defendants and others caused them to be submitted to the Department of Housing and Urban Development (HUD).  It was then part of the scheme for WILLIAM MENDEZ to compensate his employees acting as real estate agents by paying them approximately half of the commissions earned from the fraudulent transactions.  The indictment includes a criminal forfeiture count, where, if convicted, the defendants will be required to pay $80,654.45, which constitutes the traceable proceeds derived from the criminal activity.

An earlier post (here) discusses the outcropping of such mortgage fraud cases throughout the U.S.  Fraud goes where the cheap money resides. (ph)

Addendum - And private parties are also out there fighting mortgage fraud.  See here. (esp)

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