In Georgia there is a rash of mortgage fraud happening. The scary part is that the people doing this are people learning the tricks of mortgage fraud while in jail. They go in for dealing drugs and when they come out they are right into creating fraudulent mortgages.
I do not know the answer to this but I will tell you, the damage to the real estate industry if the rising trend in mortgage fraud continues will be huge. We trust the government not to take our land, no matter what the Supreme Court said with the Kelo decision, but the fear of losing our home to mortgage fraud is real and scary.
“This is armed robbery without a gun,” McLaughlin told a group of nearly 100 Realtors and other real-estate professionals Thursday at a meeting of the Athens Women’s Council of Realtors.
“I got a guy who was convicted of drug trafficking, and the first thing he did when he walked out of jail was mortgage fraud,” McLaughlin said. “And where do you think he learned it? In prison. We’ve shifted from the traditional white-collar criminals to the real bad, bad people doing these crimes.”
The women’s council invited McLaughlin to speak at their annual luncheon after police began to arrest people in a massive alleged mortgage fraud that involves about 100 of the 124 houses in Milford Hills, a subdivision off Barnett Shoals Road, according to the Realtor group’s president, John Morrison.
Because of everything that’s going on, we thought it was especially important to let new agents understand what mortgage fraud is, how it occurs and how to avoid getting caught up in it,” Morrison said.
Agents who don’t know the red flags to look for, such as houses selling at inflated prices for home improvements that were never done, can unwittingly become a party to fraud, he said.
Georgia leads the nation in mortgage fraud cases, according to McLaughlin, who drafted the Georgia Residential Mortgage Fraud Act that was signed into law in May 2005.
“The attention is now squarely focused on Georgia not just because of the fraud, but because what we’re doing to combat fraud,” McLaughlin said.
Before the new law, it was difficult for authorities to build mortgage fraud cases because they had to cobble together existing statutes that covered fraud, theft by conversion, theft by deception and other crimes.
Officials say the alleged $7 million Milford Hills fraud scheme involved at least two dozen people, mostly “straw buyers” who allowed others to use their identities for property transactions that involved fraudulent appraisals and loan applications.
Included among the 12 people arrested so far and charged under the state Racketeering Influenced and Corrupt Organizations… via Athens Online (subscription required)
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You left out the fact that they have also bought real estate licenses, broker licenses, formed their own mortgage companies (of 2 people), title companies, notaries and loan processers. Making their new career very lucrative and staying pretty much within the world they are familiar with; drug dealers in business together once again.