Approximately 100 average folks from Virginia were tricked into letting con artists involve them in a scam to defraud mortgage companies. Under the guise of an investment group, the Virginian families thought they were investing in homes in Indiana as part of a group. Instead the con artists sold the homes at inflated prices to these people using their credit and without their knowledge.

The borrowers, who include truck drivers, factory workers, a pastor and a hair stylist, say they were duped by acquaintances into signing stacks of documents and didn’t know they were applying for loans. Instead, they thought they were joining a risk-free “investment group.”

Now, many of the loans are in default, the borrowers’ credit ratings are in ruins, and lenders are pursuing the organizers of the purported investment group in court. Companies stuck with the defaulting loans include Countrywide Financial Corp., the nation’s largest home lender, and Argent Mortgage Co., another big lender.

A lawsuit filed by Countrywide accuses the organizers of acquiring homes and then fraudulently selling them for a quick profit to the Virginia borrowers. Representatives of the borrowers put the total value of loans involved at about $80 million, which would make it one of the largest mortgage-fraud cases ever. via the Wall Street Journal (subscription required)

I am scared that these kinds of cases are going to come to light as mortgage companies stopped doing their due dilligence in the name of speed and the bottom feeders of society are learning the tricks of the trade.

Update:

USA Today: ‘The company alleges that Robert Penn worked with relatives in Virginia and associates that included appraisers and mortgage companies to defraud the victims in a case that could total about $80 million in loans. In a lawsuit filed in Marion County, where most of the Indianapolis-area properties are located, Countrywide claims the defendants duped their victims by inviting them to take part in either an “investment opportunity” or a “real estate investment club.”’

via the IndyStar :

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