Minnesota Feds Estimate $50 Million In Losses In Alleged Mortgage Fraud Conspiracy

The Minneapolis Star Tribune reports:

• "Authorities revealed in federal court Wednesday that they are investigating allegations of a mortgage fraud conspiracy involving about 200 houses in several southern Twin Cities suburbs. The investigation is tied to a rash of foreclosures in New Prague and New Market, and possibly other suburbs, and some people who were renting the houses have been evicted. The government estimates losses of more than $50 million."

• "The foreclosures are rooted in the sale of homes by Eagan builder Parish Marketing and Development to a small group of investors, according to the company's attorney. Loan documents were allegedly falsified to make the buyers appear as if they qualified for the mortgages when they did not."

• "[Ramiz Yousef Saadeh, a] 30-year-old loan officer for U.S. Bank[,] pleaded guilty Wednesday in federal court in Minneapolis to one count of conspiring to commit mail fraud in connection with the alleged mortgage fraud. Saadeh said that at the direction of a homebuilder identified in court only as "Company A," he provided mortgage brokers with falsified financial data from 2004 through May of this year. The information was used so that "straw purchasers" could obtain loans under false pretenses to buy the homebuilder's properties."

Parish Marketing and Development and its principals, Michael and Ardith Parish, have not been criminally charged at this time. An official in the U.S. Attorney's office in Minnesota said "the investigation is ongoing and we are unable to comment further at this time."

For more, see:

• Alleged mortgage conspiracy led to $50 million in losses (A plan using "straw buyers" and falsified loan data resulted in a rash of foreclosures in southern suburbs) (if link expired, try here).
• For a summary of how the events happened in this story, according to those familiar with the transactions, see From bought to rented to foreclosed (if link expired, try here).

Go here for other posts on this ongoing investigation.