Mortgage Fraud Suspects Indicted in California: How Could They Get Away With It?
"Operation Stolen Dreams" lands another alleged mortgage fraud conspirator this week. Nationwide, the feds have stepped up prosecution of mortgage and bank loan fraud.
This time, it's a builder in Chico, Calif., who has been indicted for allegedly selling unsold new homes to non-existent or straw buyers, thereby scamming loan funds from banks and other duped lenders. Per the FBI and U.S. Department of Justice, almost 500 people have been indicted nationwide since March 1, in a coordinated effort to address the problem of crime in the housing and mortgage industries. Losses from fraud schemes are estimated in excess of $2 billion.
In the Chico case, builder William T. Baker is now facing charges for mortgage fraud for allegedly setting up fake buyers for unsold homes, creating fraudulent loan applications and applying for loans for more than the homes were worth at the time in 2007 and 2008. Foreclosure was the end result, while Baker and accomplices allegedly pocketed the proceeds from the inflated home sales.
Anyone who has ever applied for a mortgage knows that extensive tax and financial information must be produced and that reams of documents must be signed, initialed and often notarized.
How could scammers be able to perpetuate such kinds of fraud?