The Pennsylvania broker will serve five years in prison for the massive mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans worth more than $10 million, according to prosecutors. His wife was sentenced to home detention. Together, they are ordered to forfeit $400,000.
The couple’s attorney also faces prison.
According to prosecutors, the defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.
The defendants promised financially distressed homeowners that they would find an “investor” who would help them save their home. The defendants would then either purchase the home themselves or arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer title of the homeowner’s residence to the straw purchaser. They obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the purchasers’ finances.
The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser.
The husband and wife brokers each acted as straw purchasers for 10 homes. They also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.
An attorney was convicted of soliciting and referring distressed homeowners to the couple and using fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until the brokers had obtained an investor and a mortgage. Another defendant handled the closings for the real estate transfers, falsifying the settlement statements and manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.
Charges came after the case was investigated by the FBI, and the Pennsylvania Department of Banking.
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