Alleged Fraud for Profit Mortgage Scheme in Southern Metro
Fresh evidence from the Star-Tribune today that we have a much larger fraud-for-profit mortgage problem in the Twin Cities than many care to imagine.Authorities revealed in federal court Wednesday that they are investigating allegations of a mortgage fraud conspiracy involving about 200 houses in several southern Twin Cities suburbs…The government estimates losses of more than $50 million.To this point, the standard media script on mortgage fraud has mostly centered around individual homeowners who were preyed upon by unscrupulous lenders, put into homes or mortgages they had no hope of ever repaying, and had their lives turned upside down by the experience. Though these stories pass for decent journalism in a “little guy screwed by the big guy” sort of way, and have gotten plenty of attention in the press and from the legislature, we’ve felt for a while that they are just the tip of the iceberg, and that the bulk of mortgage and real estate fraud in the Twin Cities has been perpetrated by organized groups of individual “property investors” tied to all aspects of a real estate transaction. We fully expect to see more operations of this sort exposed in the coming months.Alleged Mortgage Conspiracy Led to $50 Million in Losses [Strib]From Bought to Rented to Foreclosed [Strib]