Indianapolis Builder May Have Recruited, Paid Straw Buyers To Purchase Homes It Built As Part Of Investment Program: Investigative Report

In Indianapolis, Indiana, the Indianapolis Business Journal reports:

• Charter Homes recruited and paid buyers to take out inflated mortgages on dozens of central Indiana homes it built, promising to manage the properties as rentals and make payments for the owners, current and former Charter business partners say. The 3-year-old local company took advantage of eager real estate investors by offering them a cash bounty for each home purchased, along with checks from Charter to cover down payments.

• But as lax credit markets tightened and home values reversed course, the scheme began to crumble, an IBJ investigation has found. Lenders now are foreclosing on at least 20 homes in five Charter subdivisions in the Indianapolis area. The lenders say they haven’t received payments since May, even though Charter continues to collect rent.

• Charter also is facing numerous liens and more than a dozen lawsuits from unpaid contractors. And its 50 or so home buyers are facing bankruptcy.

For the rest of the story, see Mortgage scheme unravels (Lenders foreclose on at least 20 Charter Homes properties).

In a related Indianapolis Business Journal story on local builder Charter Homes, see Special Report: Mystery at Charter Homes (King Park builder draws scrutiny for odd sales claims, multiple liens).