Foreclosure Cheats Netted
Thursday, December 6th, 2007Howling scavengers – the jackals and vultures, inevitably follow the predators. Rescue scammers who pose as helpers have closely followed the foreclosure crisis. The traumatized victims cry on their shoulders only to discover later that whatever was left in their pockets have been neatly picked.
A federal indictment report exposed that six people were accused of falsely acquiring title to dozens of houses. Questionable bank loans had been taken against these houses – the total amounting to more than $20 million. It was all part of a rescue game plan. The scam continued from November 2003 up to April 2005 focusing on house owners in Brooklyn and Bronx – the two boroughs of New York City.
Impending foreclosures had traumatized the owners and the cheats assured them that by deeding them the house trouble would be avoided. The argument was that the good credit of the helpers would enable the latter to get suitable bank loans that would finally stave off foreclosures. Third party ‘straw buyers’ would enjoy the title for about a year, pay off the original dues and make payments on the new mortgage. In reality the offenders paid off the original loans and pocketed the extra cash.
Lax lending practices and rising interests between 2005 and 2006, falling real estate market and shaky borrowers all contributed to the foreclosure meltdown. Thousands with weak credit history availed of sub-prime loans which were not otherwise available to them in the prime category. This led to defaults, delinquency and foreclosure. The chapter usually ended with auction and take over of the house by the banks or lenders.
During the third quarter this year there were 447,000 foreclosures in the country – the figures being inclusive of all categories of mortgages. Last year the figure was half this number – 223,000 amounting to a 34% rise.
The accused were also charged for submitting irregular false documents to various banks to inflate the value of houses so as to obtain sizeable loans for these straw buyers.
Some of the defendants – Maurice McDowall, Andrea Moore, Kerri Clarke, Marina Dubin and Michael Irving were part of rescue companies named Lost and Found Recovery LLC and Homes U us USA LLC. Another defendant, Alexander Lipkin was a mortgage broker for AGA Capital, New York. More than $1.4 million had been netted in through unscrupulous loans.
The defending attorneys remained tight lipped and unavailable for comment.
