Long Island Mortgage Banker Targeted In Four Lawsuits; Inflated Property Values Alleged

In Nassau County, New York, Newsday reports:

• [I]n two lawsuits filed in Nassau County Supreme Court, [East Massapequa resident George] Cornielle and Massapequa homeowner John Barbaro accuse [motgage banker Aaron] Wider and HTFC [Corp.] of participating in a "fraudulent property flipping scheme" that left them with hundreds of thousands of dollars in mortgages they could not afford. The lawsuits coincide with two others that were first brought against HTFC in federal court in 2006 by Residential Funding Co., or RFC, and its parent company, GMAC Bank -- banks that now own some of HTFC's loans.

• In one of those two suits, the U.S. District Court in Minnesota recently ordered HTFC Corp. to pay $731,000 to RFC, which had accused HTFC of breach of contract. RFC charged that HTFC sold it a loan based on a fraudulent appraisal and then refused to buy it back. The GMAC case -- filed in U.S. District Court in Philadelphia -- is pending.

• Last December, Newsday reported that Wider and his associates had profited from real estate deals that relied on faulty appraisals and questionable loan applications. Wider bought or sold homes and issued loans for at least 30 Long Island properties and, through a series of transactions on each deal, pushed the price of the property far above the values of comparable properties in similar neighborhoods, the story reported.

For more, see Homeowner: Mortgage banker inflated house's value.