Alleged mortgage conspiracy led to $50 million in losses
Star Tribune: September 5, 2007 - 11:43 PM
A plan using "straw buyers" and falsified loan data resulted in
a rash of foreclosures in southern suburbs.
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 investigation is tied to a rash of foreclosures in New Prague
and New Market, and possibly other suburbs, and some people
who were renting the houses have been evicted. The government
estimates losses of more than $50 million.
The foreclosures are rooted in the sale of homes by Eagan builder Parish
Marketing
and Development to a small group of investors, according to the company's
attorney.
Loan documents were allegedly falsified to make the buyers appear as if
they qualified
for the mortgages when they did not.
When the housing market collapsed this year, those so-called "straw
buyers" were
unable to resell the properties, which ranged in price from $300,000 to
$500,000.
In some cases, the buyers managed to rent out the houses, but often the
rental
payments were not enough to cover the mortgages.
http://investingforeclosures.com
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