Tuesday, November 23, 2010

One ‘Nightmare’ Mortgage: Problems From Origination Through Foreclosure

Imogene Hall, a 49-year-old Jamaican immigrant living in Miami, is exactly the kind of poster child you don't want to be. From a mortgage broker's knock on her door four years ago all the way to today, when the Florida courts may be limiting her due process, the Miami Herald has the details [1] on Hall's story, documenting the ways her situation shows many common indicators of fraud.


"If homeownership represents the American dream, then Hall's story is the nightmare," wrote the Herald's executive editor.

A broker (now serving 11 years prison) knocked on her door in late 2005 and said he could help Hall draw on some of the equity she had built in her home, where she had lived since 1997. Hall thought getting some cash would be helpful, since at the time she was having trouble finding work as a nursing aide and had bills to pay.

Ultimately, the broker and his associates pocketed $180,000 while Hall got about $50,000, the Herald reported.

The broker used a "straw buyer" -- someone other than the person living in the house -- to get the mortgage. Reuters has reported that using straw buyers was a common scam:

In this scheme, fraudsters use a fake identity or that of someone else who allows them to use their credit status in return for a fee. The seller pockets the money the buyer borrows from a lender to pay for the home.

The straw buyer listed as his employer a nonexistent Blockbuster video store, yet the lender still gave him the loan.

The broker's plot was aided by a closing agent, title agent and broker's affiliate who have all since been charged or convinced of mortgage-related fraud.

Read on.

No comments: