By BJ Austin, KERA News
http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-891133.mp3
Dallas, TX – Federal prosecutors in North Texas say they've cracked an 18 million dollar mortgage fraud scheme targeting upscale neighborhoods in Dallas-Fort Worth and Houston. KERA's BJ Austin reports.
Prosecutors came to an upscale neighborhood in McKinney to announce the mortgage fraud indictment of 40 people in a scam that involved all levels of real estate, from agents, to appraisers, to straw buyers. Those are homebuyers in name only.
U.S. Attorney John Bales says the mastermind of the scam, a Florida man, would obtain money from fraudulent loans made on the inflated values of upscale homes. Prosecutors say the Texas participants in the scheme would get payoffs or inflated fees. The homes would then be foreclosed upon, or "flipped" resold immediately. Bales says this mortgage fraud scheme was extremely bold.
Bales: You know, some flips you would see maybe tens of thousands of profit. In these particular instances, you would see the home be flipped for 250-300 thousand dollars profit in one fell swoop.
Bales says Texas is among the top 10 states for mortgage fraud.
More than half of those indicted are from North Texas. 46 of the 114 homes involved are in McKinney; a dozen on the same street. It was a group of neighbors on Hills Creek Drive who tipped authorities that something was wrong.