Posted on | November 1, 2012 |
In case you?ve ever wondered why banks are tough-as-nails when it comes to underwriting for home mortgages, here?s some food for thought.
Wanda Coleman, 59, formerly of Pauma Valley pleaded guilty Wednesday, Oct. 31, to mail fraud after the FBI busted a mortgage fraud ring that duped lenders into issuing more than $20 million worth of loans over the sale of three dozen homes in Orange, Riverside and San Bernardino counties.
Here?s how prosecutors said it worked: Coleman ID?d a property for sale; and struck a deal with the seller to pay far more than the asking price. A straw buyer, and others, would submit forged bank statements and other false documents ? from employment records to asset information ? to clinch the loan. In exchange, Coleman or her companies collected the excess. Straw buyers would then default on the notes, homes slipped into foreclosure and lenders were left licking their wounds.
The fraud racked up more than $11 million in losses, federal agents say.
For her part, Coleman faces a maximum sentence that?s as long as the conventional fixed mortgage: 30 years. Sentencing is set for Jan. 25 in Oregon federal court.
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Source: http://blog.pe.com/real-estate/2012/11/01/real-estate-straw-buys-on-inland-homes-go-bust/
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