Countrywide Sues Over Mortgage Fraud
By RICK CALLAHAN Associated Press Writer
INDIANAPOLIS -- The nation's largest home lender, Countrywide Financial Corp., is suing an Indianapolis man for allegedly orchestrating a mortgage fraud scheme in which dozens of Virginia residents were tricked into buying homes in Indiana at inflated prices.
The Calabasas, Calif.-based 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."
The victims were not required to make down payments or cash contributions.
The suit alleges the paperwork that truck drivers, retirees, factory workers and others in or around Martinsville, Va., signed eventually made them "straw borrowers" liable for bogus loans for one or more homes by submitting false mortgage applications.
The victims were not given copies of the "investment" documents and were rushed into signing them after being told they needed to be quickly delivered to Indianapolis, the lawsuit claims.
"The straw borrowers were not asked to read the documents they signed, and in some cases were told there was no time for such a read, or that it was unnecessary," the lawsuit states.
Tony Pickett, an Indianapolis real-estate agent who's representing 39 of the victims, said the case involves about 400 loans that average about $200,000 each.
He and his wife, Robin Pickett, both real-estate agents at Prudential Ron Matthews Realtors in Indianapolis, are trying to resell the homes located in rundown inner-city neighborhoods and new subdivisions in the Indianapolis area.
"Our goal is to try to help these people, whether it's to sell the property or not, to help them get rid of it. A lot of things have happened to these people that they didn't deserve because of this,"
According to the lawsuit, Penn, his sister, Sharon Penn, who lives in Martinsville, Va., six other individuals and a number of companies obtained purchasing agreements for Indianapolis-area properties at market value, but then had them appraised at significantly higher amounts.
The court documents contend that the Penns and their associates then bought the homes in the names of the Martinsville residents who had signed the "investment" paperwork giving the defendants use of their names, credit histories and signatures.
The lawsuit alleges that the defendants obtained the properties for an average price of $50,000 but "sold" them to the unknowing victims for an average inflated price of $120,000 each, then pocketed the difference.
In some cases, the lawsuit contends, the Penns and their associates closed on several properties in a single day in the same buyer's name.
Rick Simon, a spokesman for Countrywide, said Thursday that the company would have no additional comment on the lawsuit.
Messages seeking comment were left Thursday at the Indianapolis offices of Robert Penn's lawyers, but a secretary answering calls said they were unwilling to comment on the suit.
Roger Rayl, a spokesman for the Marion County prosecutor's office, said the office is assisting Virginia authorities in their investigation of the mortgage fraud allegations involving Penn. He declined to comment further.
No criminal charges have been filed and Mary Bippus, a spokeswoman for the U.S. Attorney's Office in Indianapolis, declined to comment on whether federal prosecutors were investigating the mortgage fraud allegations.
A spokeswoman for the FBI, Special Agent Wendy Osborne, also declined to comment on whether the agency was investigating the allegations.