Mortgage Scam Causes Some California Properties to Foreclose
A California mortgage scam resulted in foreclosed properties and a $5.5 million loss.
Almost a dozen people were indicted on charges of mortgage fraud in a California court recently, the U.S. Department of Justice reported. The defendants were also accused of falsifying information on mortgage documents such as purchaser income and home values.
There were 30 pieces of residential real estate involved in one leg of this scandal, with at least 28 having to go into foreclosure, the Justice Department said. Lenders lost more than $5.5 million from this mortgage scam.
The mortgage scam included putting inflated income and false employment information on the loan applications, the Justice Department said. When lenders tried to verify the data, someone often accounted for the incorrect information. The criminals also usually offered home sellers anywhere between $15,000 to $40,000 more than the asking price of the property.
Mortgage fraud scams are not limited to California. They are occurring all over the country. The Federal Bureau of Investigation recently made close to 500 arrests nationwide of criminals participating in this illegal activity.
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