Beware Of Increase In Mortgage Fraud Scams And Schemes

The FBI has noted a significant increase in various kinds of mortgage loan scams and schemes that target troubled homeowners. Homeowners should make sure that they are dealing with reputable established companies when undertaking anything important regarding their home and/or home mortgage, and should always consider seeking advice from their own trusted attorney and accountant advisors. Remember the axiom, "if it sounds too good to be true, it probably is". Below is an example of a recent scam.

Five people behind Metro Dream Homes and the bogus mortgage payment program were actually running an elaborate deception—one eventually unraveled through the cooperative efforts of federal and state law enforcement agencies.

“The effects of this wide-ranging mortgage fraud scheme are particularly disturbing against the backdrop of today’s economic environment,” said Thomas J. Harrington, Executive Assistant Director of our Criminal, Cyber, Response, and Services Branch.

Here’s how the scam worked:

• Between 2005 and 2007, victims were persuaded into investing at least $50,000 with Metro Dream Homes, either by refinancing their existing homes or buying new homes at inflated prices.
• Investors were told not to worry about high mortgages because Metro Dream Homes would pay their future monthly payments and pay off their mortgages within five to seven years using returns on the homeowner’s original investment. Then the homeowner and Metro Dream Homes would own an equal interest in the home.
• Victims were told that their $50,000—not including an administrative fee of up to $5,000—would be used to fund investments in automated teller machines, flat-screen TV displays that carried commercial advertisements, and Touch-N-Buy electronic kiosks that sold telephone calling cards and other items.
• To make the scam seem more legitimate, the company marketed its program through live presentations at posh hotels in Washington, D.C.; Baltimore; and even Beverly Hills, California.

In the end, it was a classic Ponzi scheme: the proceeds from later investors went to pay the mortgages of earlier investors. The ATM machines, flat-screen TVs, and electronic kiosks never generated any meaningful revenue, federal prosecutors contend.

And the bulk of the money? It lined the defendants’ pockets—with $200,000-a-year salaries, luxury cars, and travel to major sporting events like the 2007 Super Bowl.

By the time law enforcement shut down the company, homeowners had already invested about $70 million. When Metro Dream Homes stopped making the mortgage payments, the homeowners were left holding the bag. The defendants, meanwhile, are facing long prison terms for multiple counts of fraud, conspiracy to commit money laundering, and other charges.

For More Information Contact The Atlanta, Georgia Law Offices Of AttorneyBritt:

AttorneyBritt
Gary L. Britt, CPA, J.D.
1200 Abernathy Road, Suite 1700
Atlanta, Georgia 30328

404-567-6445

“Lawyer's That Mean Business”

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