California Mortgage Fraud suspects formally charged
FBI and IRS together with other agencies have formally placed charges of running foreclosure rescue scams on 19 persons based out of South California. The agencies, working on an operation code-named Operation HomeWrecker, arrested Charles Head of La Habra and Jeremy Michael Head of Huntington Beach along with 17 others and charged them with mortgage fraud.
The arrested individuals were working for a company owned by Charles Head called Head Financial Services and are said to be related to him. They are said to have cheated poor home owners facing foreclosure by offering them a way out.
This is how they allegedly ran the scam
They are said to have contacted people listed with foreclosure of their loans. They would offer the home owners a way out, typically days before their eviction. The home owners would be asked to add another person in the title of their property.
They explain that the new person, who is an associate, is an investor who was willing to take over the mortgage and pay the loan out on behalf of the house owner. The owners, meanwhile, could continue to live in their homes by this arrangement. In return, they would be asked to pay rent to the investors. This generally is lesser than their loan installments making the offer seem more lucrative for the poor borrowers.
Then the company would take out fresh loans against the property without the knowledge of the original owner. After making payment for the loan for a few months, they allow the new loan to foreclose by not continuing with the payments. After foreclosure, they take over the remaining equity of the homes. The original owners would be left with neither a home nor the equity that they had built up over the years.
Scam, just the tip of the iceberg, believe experts
Law enforcement agencies warn that there might be more scams operating in the country. They have asked people who have availed of home loans to be especially careful of them. They are concerned that professional from the industry might be misusing their knowledge and skills for illegal gain.
Ill-informed and helpless people might end up being their victims. They may fall for such scams as the last resort. Operation HomeWrecker was launched to prevent this by uncovering financial bungling in the real estate industry.
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- Utahns Charged in Mortgage Scam
- Mortage Fraud Industry-Booming in times of recession!
- Foreclosure Rescue Scams figuring New heights in Hard Economy Season
- Property Fraud-Real Estate Scams
