Nine Arrested On Mortgage Fraud Charges
MSNBC is reporting that the FBI arrested nine people who had a scheme in Queens to use fake identities to get bank loans through New Generation Funding, a mortgage broker. The moral of the story for the worried homeowner is to choose your mortgage broker carefully. They are not all the same.
Here is the story:
WNBC-TV
5:03 p.m. EDT April 25, 2007
NEW YORK – The FBI arrested nine people Wednesday on charges of engaging in a multimillion-dollar Queens-based mortgage fraud conspiracy, authorities said. Assistant FBI Director Mark Mershon said 10 people were named in court papers, which identify three of the conspirators as principals in New Generation Funding, a mortgage broker with a branch office in Jackson Heights. Court papers say they recruited “straw buyers” from the Bangladeshi community to purchase properties with false identities and to secure mortgage financing.
The court papers say the object of the conspiracy was to obtain money on credit with no intention to repay. The alleged members of the conspiracy repeatedly sold the mortgage properties among themselves, thereby increasing the appraised value for each property, the court papers say.
In 2005, mortgage lenders became suspicious of the high foreclosure rate for mortgages from New Generation Funding, causing the FBI to initiate an investigation, authorities said.
Key to the mortgage fraud scheme were the false identities purchased from Bangladeshi emigrants returning to Bangladesh or identities created fictitiously. Straw buyers were paid $5,000 to purchase multiple properties and obtain multiple mortgages. The buyers frequently falsified information about their employment, income and whether the homes would be their principal residences, authorities said.
Each person charged faces up to 30 years in jail and a fine of $1 million if convicted.