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Mortgage Companies Sued by Attorney General’s Office
09/18/08 - 01:42 PM
Associated Press
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click for larger image Tallahassee, Fla:

The Florida Attorney General’s Office is suing 10 companies and 15 individuals for their alleged roles in a major mortgage fraud scheme.

Attorney General Bill McCollum says it is probably the most dramatic mortgage fraud case that his office has dealt with.

According to the lawsuit filed Wednesday in Orlando, the defendants obtained more than $37 million in mortgages for at least 60 home purchases and siphoned off more than $6 million of the proceeds for their own use. Approximately 50 of the houses later went into foreclosure.

Starting in July 2005 and continuing through at least January 2007, three of the ring’s leaders allegedly defrauded lenders by recruiting “straw buyers” with good credit. They then used those buyers to create false applications to buy homes throughout central Florida.

Attorney General Bill McCollum says the group conspired with realtors to artificially inflate home prices. They then applied for bigger loans and pocketed the difference.

In one case, McCollum says a home in central Florida was on the market for $450,000 dollar. But the group was able to inflate the price and secure a loan for $750,000. The group then allegedly diverted $6 million from those homes to overseas banks accounts.

While the Attorney General’s Office is pursuing civil action to recoup some of the defrauded money, McCollum says criminal charges could follow. He says he could not comment on any possible criminal action at this time.
   
(Copyright 2008 by The Associated Press.  All Rights Reserved.)

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