Author: Mortgage Fraud Alert
Arrests halt huge mortgage-fraud scam
Fake loans total $37 million
An ongoing effort to stamp out real-estate scams and decrease the number of foreclosures in Indianapolis has exposed a mortgage-fraud ring involving 568 homes and more than $37 million in fraudulent subprime loans, officials said this week.
Six men have been charged with felony theft and welfare fraud in Marion County, Indianapolis Housing Agency officials said. Mehran Valiyi of Indianapolis; Brian Beach of Greenwood; Marcus Ward of Carmel; and Omar Dillard of Fishers, have been arrested and face court dates. Arrest warrants have been issued for Ladarius Patrick of Fishers, and Preston Forte of Chicago.
The six are accused of committing fraud and theft primarily from 2004 to 2007. Valiyi and Beach are accused of obtaining 397 fraudulent subprime loans.
"Anyplace that they could exercise greed to get money, they went after it," Indianapolis Housing Agency Executive Director Rufus "Bud" Myers said.
Mortgage fraud is fueling the city's high foreclosure rate, which is bringing blight to dozens of Indianapolis neighborhoods. The Housing Agency's announcement Wednesday comes on the heels of a parallel effort by an anti-fraud task force set up by the U.S. attorney in Indianapolis in 2002.
The Marion County prosecutor's office accuses the six of obtaining $283,628 in improper Section 8 payments from the U.S. Department of Housing and Urban Development. The federal subsidy program increases affordable housing choices for low-income households by allowing families to choose privately owned rental housing.
There are various ways mortgage fraud is committed.
Commonly, an individual buys a home either through a bank foreclosure or a sheriff's sale, obtaining subprime loans and registering it as a Section 8 house.
Tenants move in, and then the owners start receiving government money. However, the owner never pays the mortgage or never pays for the property. When the mortgage company demands payment, the property goes into foreclosure, forcing the tenants to move.
Another way is that the owner receiving Section 8 payments sells the house to someone who is not entitled to receive the HUD money. The original owner does not inform HUD of the sale and continues to receive the money.
Using a burned, vacant and boarded-up home at a news conference, authorities said they intend to seek restitution. They say the ongoing multiagency Operation Clean Sweep, funded by a federal $1.3 million public housing grant, is making progress. But the effort is far from finished.
"These cases are being tracked. We are trying now to look towards the future and spread these kind of initiatives all over the city," said Indianapolis Metropolitan Police Department Lt. Marshall DePew, a community crime reduction strategist. "(We can) do a lot more of the good work that's been done today."
Authorities say their eventual goal is to tear down unoccupied homes or find legitimate owners, said Marion County Deputy Prosecutor Barbara Crawford.
But as the conditions of the homes show, the impact of such fraud extends beyond each address.
Myers said the schemes have "devastated block after block of many formerly vibrant" neighborhoods.
When a house ends up in foreclosure, property taxes don't get paid. The demand for public safety and neighborhood services -- such as picking up trash and addressing zoning violations -- skyrockets. And residents have to live next to eyesores.
The Rev. Mel Jackson, a longtime community leader, said scammers want to "exploit common folk and misuse their trust . . . and cause so many people to end up homeless."
Source: http://www.courier-journal.com/apps/pbcs.dll/article?AID=2008804110471
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