Probe Into Alleged Colorado Springs "Cash Back" Scam Triggered By Suspicious County Assessor

In Colorado Springs, Colorado, The Gazette reports:

• The mortgage meltdown on Balsam Street that led to five foreclosures prompted an investigation Tuesday by the state's top real estate cop. Erin Toll, director of the Colorado Division of Real Estate, said it will be a "high priority" for her staff to determine whether any wrongdoing led to the Balsam foreclosures and "subpoenas are being drafted as we speak." Her investigation is a response to a formal complaint filed Tuesday by El Paso County Assessor Mark Lowderman, who became suspicious after being questioned by The Gazette for a story published Tuesday about the mortgage meltdown.

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• Lowderman asked Toll to look into allegations and admissions made by Colorado Springs landscaper Andrew C. Aranda, who bought all five houses within a 48-hour period in November 2006 using $1.9 million obtained from five lenders. Aranda said he was part of a real estate kickback scheme involving a mortgage broker, real estate agent, appraiser and others. [...] Aranda, 27, told The Gazette that he signed documents suggesting he planned to live in each of the houses, though he never intended to move. The deception allowed him to obtain 100 percent mortgages at lower interest rates than if he had described the purchases as investments for resale or rental. All five houses ended up in foreclosure and four have resold, each for about $100,000 less than the price Aranda paid.

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• Already, Lowderman said he suspects another five houses on Balsam and nearby Fossil Butte Drive may have been involved in a similar real estate kickback scheme. [...] "In one case, it looks like a man bought three houses - one on Balsam and two on Fossil Butte - and another man bought one on Balsam and one on Fossil Butte," Lowderman said. He said a quick check of sales records showed the transactions followed a similar pattern to the Aranda deals and involve some of the same players.

For more, see State investigating kickback scheme on Balsam Street (Fraud probe likely, county assessor says).

For a list of the five homes purchased by Aranda that ended up in foreclosure shortly thereafter, see Prices of Balsam homes, then and now.