Minnesota Feds Probe Alleged Mortgage Scam Involving Condo-Converted Buildings That Left Straw Buyers Holding The Bag

In Minnesota, the Minneapolis Star Tribune reports:

• Federal officials are investigating a Hastings couple in a new twist on mortgage fraud -- converting apartment buildings in Rochester, Sauk Rapids and Spicer into condominiums and then allegedly using phony buyers and bogus bank records to secure more than $5.5 million in financing.

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• The leaders of the alleged scheme, James and Teresa Hoffman, are accused by the FBI of selling dozens of condos "at substantial profit" to a handful of buyers who never intended to live there and never really had to pay for them.

• Instead, the couple supplied the buyers' downpayments, propped up their bank accounts and falsified their mortgage applications, the FBI alleges. They then used rent from the condos to cover the straw buyers' mortgage payments, according to a search warrant affidavit filed in federal court.

For more, see New twist on mortgage fraud: Did rent money 'prop it all up'? (The FBI is investigating mortgage fraud that allegedly left straw buyers of condominiums holding the bag. No one has been charged).