Federal Judge Throws Out Suit In Pennsylvania "Wrap Around Mortgage" Ponzi Scheme
- A federal judge has dismissed a suit aimed at forcing 24 mortgage companies to provide relief to more than 800 victims of Wesley A. Snyder's mortgage Ponzi scheme. [...] In his memorandum [last] Friday, U.S. District Judge James T. Giles rejected a suit intended to become a class action against 24 mortgage companies that Snyder sold mortgages for. The suit was originally filed on behalf of a Berks County couple who alleged that Snyder was a servicing agent for a pair of mortgages signed with Bank and County Wide (which was sold to Sun Trust). It alleged that the mortgage companies failed to monitor Snyder's actions. Snyder pleaded guilty to one count of mail fraud and admitted to engineering a Ponzi scheme that will cost his customers an estimated $25 million more in increased mortgage costs.
- Under Snyder's system, customers would refinance their mortgages for thousands of dollars more than they owed, then return the extra cash to Snyder, who wrote "wrap-around" mortgages at interest rates a point or more lower than standard rates.
For more, see Suit in Snyder case tossed.