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OLD TRICKS, SAME TRAGIC RESULTS from Mortgage Scammers!

"OPERATION HOMEWRECKER" - CA LAW ENFORCEMENT OFFICIALS INDICT 19 ON ALLEGED $12 MILLION MORTGAGE FRAUD SCHEME!

The tactics are not new.  They have been used across the country, including here in and around Chicago, to bilk thousands of distressed homeowners facing foreclosure. This California case is quite typical.

The victims usually have not made their mortgage payments in several months, and lender action to foreclose on their homes has begun.  The names, addresses, and unpaid mortgage balances are a matter of public record across the country.  These homeowners are often deluged with offers of help from legitimate mortgage lenders, Real Estate Professionals offering help, normal investors looking to purchase homes at a deep discount, and scam artists attempting to take advantage of the homeowner's misfortune.

In California, so-called "investors" would offer thousands up front to cover a distressed homeowner's mounting debt.  They offered to pay their outstanding and future mortgage payments, in exchange for monthly rent payments from the homeowners.  Homeowners would agree to add these "investors" to the title on their home. 

These scammers were actually "straw" buyers, who, in collusion with crooked mortgage brokers and some Realtors earning a percentage of the scammer's take, would often replace the true owners on title.  They would then draw large loans against the home's equity, never pay the original loan, and then disappear.  The true homeowners would then quickly face foreclosure, and eviction from their property.

The alleged leader of this mortgage fraud scheme was Charles Head, of Los Angeles CA.  He targeted distressed homeowners using mass email and broadcast faxing, and recruited unethical mortgage partners through the Internet.  In total, it is estimated Head obtained fraudulent titles to more than one hundred homes, and procured millions of dollars through improperly-obtained home equity lines of credit.

Our Team encountered a trusting soul here in the Edgewater Neighborhood of Chicago last year who fell victim to a similar scam, although on a much smaller scale. 

Using a Quit Claim Deed, she added an acquaintance to her title, under the guise of him paying her delinquent mortgage payments on a home about to fall into foreclosure.  He offered free rent for six months to the desperate homeowner, and the option of selling the home back, at the cost of the payments, at the end of six months if her financial condition improved.

The unfortunate Edgewater homeowner never had a chance to reclaim her long-time home.   The scam artist drew out an equity line, never made a mortgage payment, and skipped town.  The elderly lady faced foreclosure before the six months expired.

Please see Amy Le's Homescape Blog posted March 27th, linked through today's Chicago Tribune, for more info on the tragic California case, as well as a link to the actual Federal Indictment against Head.

DEAN MOSS & DEAN'S TEAM CHICAGO

Posted: Sunday, March 30, 2008 10:18 AM by Dean's Team

Comments

BlogChicagoHomes.com said:

Good Morning, Everyone! In many areas across the U.S., where the housing market has weakened and distressed

# March 30, 2008 5:35 PM
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