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A Warning About HUD Quality Control

DEC 13, 2012 5:09pm ET
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Quite a few and it took the federal government 10 years to catch them.  Doesn’t say a lot for the banks’ quality control system does it?  Is your Red Flags Manual in place? 

DETROIT MAN GETS MORE THAN SIX YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD

FACTS

On Nov. 29, Jonas Rogers was sentenced to 78 months in prison for his role in a mortgage fraud and identity theft scheme.

Rogers was found guilty by a federal jury of conspiracy to commit wire fraud and money laundering. In September 2006, Rogers and others used a qualified straw buyer to purchase an investment property in an upscale neighborhood in Oakland County, Mich. for $799,000. The property was financed with what was then called an 80/20 loan, where the financial institution provides two mortgages covering the entire price of the property with “zero down” from the buyer. Rogers lived in the property for a few months. When the bank sought payments on the house, Rogers convinced the straw buyer to flip the house and sell it for more money.

In April 2007, the property was “sold” for $1.1 million to an impostor using the stolen identity of a local doctor. A new mortgage in the amount of $990,000 was obtained and the straw buyer received $62,786 at the closing. Evidence showed that this money was subsequently transferred to Rogers in large sums of cash or through checks made payable to his mother. No payments were made on the new mortgage and the property went into foreclosure. (usattyedmi113012)

MORAL

Loan went back six years and the federal judge gave him six-and-one-half years in federal prison. One year for each year the loan was around. Like I have been saying ad nauseam, the federal prosecutors are still working on 2006 loans and coming forward.

THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.

AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.

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