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 Sacramento, a U.S. attorney said “Operation Homewrecker” investigated one of the largest mortgage frauds ever probed by the FBI and the Internal Revenue Service. 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. 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. The ring allegedly operated out of Southern California led by a 33-year-old La Habra resident and owner of Head Financial Services, who was arrested on Friday. Two of the
defendants operated out of Phoenix, Arizona; one out of Colorado Springs, Colorado; and one out of Johnstown, Pennsylvania. Two defendants worked as straw buyers who in most cases took over title to the homes, accepted “rental payments” from the true homeowners and failed to make the agreed-upon mortgage payments to the bank. The investigation shut down the ring in 2006 but as the investigation continues the number of victims and money stolen is expected to be higher, said the U.S. attorney.

Source: Charges laid in alleged nationwide mortgage scam - Yahoo! News

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