Dallas Morning News
Signs of Fraud

Here's how the FBI suggests consumers watch for mortgage scams:

Get referrals for real estate and mortgage professionals. Check their licenses.

Check the property's title history to see if it has been sold repeatedly within a short time; that could signal that the property has been "flipped" and the value falsely inflated.

Look at written information to include recent comparable sales in the area.

If it sounds too good to be true, it probably is. Promises of extraordinary profits in a short time should be a warning sign.

Never sign loan documents that contain blanks. That would leave you vulnerable to fraud.

If you don't understand documents you are about to sign, reread them or get help from a lawyer.

Make sure the name on your mortgage application matches the name on your identification.

Know and understand the terms of your mortgage. Check your information against the information in the loan documents to make sure they are accurate and complete.

In recent years, a handful of local mortgage cases have unfolded in federal courtrooms:

2004: Seven homebuyers and their real estate agent were indicted in a scheme in which the homes were purchased based on fake income tax returns and other fictional financial data. The buyers were immigrants who had no credit history. The agent, who profited through sales commissions, was sentenced this fall to two years in prison. The buyers received either probation or one-day jail terms with a few years of federal supervision. None of the loans went into default.

August: Six real estate insiders, including an appraiser and investors, were indicted after prosecutors said the insiders flipped 10 homes among themselves, inflated home values by as much as $170,000 along the way and split the loan profits. They have yet to go to trial. The case dates to 2003, when two other men were indicted in the same type of scheme. Those two eventually pleaded guilty to fraud.

September: Three Dallas businessmen and a title company employee were indicted after being accused of paying straw borrowers $7,500 to $10,000 to use their credit for inflated home loans that authorities say they never planned to repay. The men are awaiting trial. Prosecutors allege that profits in the scam ranged from $40,000 to $140,000 per home.

November: A federal jury convicted three people in a mortgage scheme, wrapping up a three-year investigation of seven North Texans who made money off home loans by doubling the property values of nine houses in cities including Arlington, Addison and Rowlett. Four others, including two straw buyers, pleaded guilty to fraud charges. All seven await sentencing.

SOURCE: Federal court records

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