Anatomy of a "Cash Back" Mortgage Scam

In Florida, the St. Petersburg Times published an investigative report of 36-year-old Jeremy Marc Morton, a convicted felon originally from the Detroit area who spent 11 years in a Michigan state prison on cocaine and attempted escape charges before moving to Pinellas County and getting into the real estate business in 2005. The specific area of the business that he got into was the "cash-back-at-closing" area, where he reportedly pocketed over $370,000 in six transactions without having his name ever appearing on documents recorded in the county public records.

The story describes how he approached one local couple, who owned six properties and from whom he agreed to buy them all. It also describes how he made use of two straw buyers, one of whom was also a convicted felon and had been just completed an eight year sentence in a Florida prison and the other being an out-of-town man from Detroit, in whose names the homes were purchased. The transactons involved inflated sales prices, mortgages in amounts that greatly exceeded the amounts paid to the sellers of the six homes, with the excess going to Morton. After the sales, Morton stayed involved with the properties by reportedly equity skimming the properties, collecting the tenant rentals while ultimately defaulting on the mortgages and letting the homes go into foreclosure, with the homes' tenants unwittingly finding themselves subject to eviction. For more, see Foreclosures follow dealmaker (Padded prices on contracts send money to a man who is not even listed as part of the transactions). alpha