NYC Feds Charge Four In Alleged Cash Back, Mortgage Scam; Ex-Cons, Public Housing Tenants Recruited As Straw Buyers; Homes End Up Foreclosed

The New York Post reports:

• The feds [Wednesday] charged four people with running a $10 million scam that used ex-cons and public-housing tenants to secure subprime loans from banks tied to the mortgage meltdown.

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• The swindle - involving distressed properties in Brooklyn, Queens, Long Island and Westchester - targeted lenders, including Fremont Investment and Loan, First Franklin, and Mortgage Lenders Network USA, authorities said.

• According to the feds, the ring, led by Sharmon Howell, 35, obtained phony appraisals, which the buyers used to claim they were purchasing the homes for more than they actually cost. They allegedly obtained 100 percent financing for mortgages at the inflated values. Then the ring pocketed the difference between those amounts and the real purchase prices - and let the houses go into foreclosure, according to acting Manhattan US Attorney Lev Dassin.(1)

For the story, see $10M LOAN-SCAM RING BUSTED: FEDS.

For the Manhattan U.S. Attorney's press release, see Four Indicted In Mortgage Fraud Scheme Involving Over $10 Million In Loans.

(1) Others charged were David Moore, 40, June Persaud, 45, of Brooklyn, and Oscar Ancrum, 54, of Manhattan.