SACRAMENTO (Reuters) – “U.S. officials said on Monday that they had charged 19 people with targeting desperate homeowners facing foreclosure and stealing at least $12.6 million through illegal mortgage and loan activities.
At a news conference in the California capital Sacramento, U.S. Attorney McGregor Scott said “Operation Homewrecker” investigated one of the largest mortgage frauds ever probed by the FBI and the Internal Revenue Service.
“The markets in this country are tottering because nobody knows how much fraud is out there,” he said.
The prosecution comes as foreclosures have risen sharply across the United States, especially in places such as California’s Central Valley. Stockton, south of Sacramento, has experienced the highest foreclosure rate in the nation.
Sealed indictments were filed March 13 and February 28 against 19 people — including three licensed mortgage brokers — charged with cheating homeowners across the country out of their homes.
In the indictments made public on Monday, federal investigators said they had cracked a major mortgage-fraud ring that scammed 115 homeowners facing foreclosures into turning over the titles to their houses.
The homeowners were conned into believing the scheme would save their homes, their equity and their credit. Instead, they lost their homes.
In the fraud, homeowners agreed to pay rent to members of the ring who they thought would rescue them by covering their mortgages. Instead the owners lost title to their homes and the alleged fraudsters siphoned off any remaining equity by borrowing more money against the properties.”
I heard about this on NPR on the way home today and found it on the web…