Tuesday, April 28, 2015

Toledo Feds Pinch Pair For Allegedly Clipping Homeowners For $1M+ In Loan Modification Racket; Suspects Allegedly Made False Promises To Trick Victims Into Making Monthly House Payments To Them, Then Pocketed The Cash Instead Of Applying Proceeds Toward Mortgages In Foreclosure

From the Office of the U.S. Attorney (Toledo, Ohio):
  • Two Toledo-area men were indicted for wire fraud related to stealing more than $1 million from hundreds of people through a fraudulent loan-modification scheme, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.

    Indicted are Jason J. Keating, 36, of Toledo, and Christopher J. Howder, 37, of Perrysburg. They worked at Making Home Affordable USA (MHAUSA) from 120 10th Street in Toledo, where Keating was self-described president and Howder was the self-described underwriting manager.

    The company used various names but homeowners were told MHAUSA had a very high rate of success and that customers could achieve modified interest rates as low as 2 percent, according to the indictment.

    Prospective participants were told there was a flat fee for service, generally between $495 and $795. Participants were told to stop making monthly mortgage payments to their lenders and instead to pay a percentage of their mortgage to MHAUSA, according to the indictment.

    Participants were told MHAUSA would hold these payments in a “stimulus reserve” account to demonstrate the participants could reliably make payments, and that once the loans were modified, the money would be turned over to the lenders, according to the indictment.

    The money obtained through the fraud was spent on concession at professional sports venues, restaurants, cash withdrawals, gentlemen’s clubs, a tanning salon Las Vegas hotel, a jewelry store and a lingerie store, according to the indictment.

    “These defendants took $1 million from people struggling to hold onto their homes,” Dettelbach said.

    “They used money obtained through fraud to pay for expensive restaurants and vacations,” Anthony said.
Source: Two Toledo-Area Men Indicted for Stealing $1 Million through Loan-Modification Scheme.

Editor's Note: Subsequent to this indictment, the Toledo Feds pinched a third alleged cohort, Constance Kanary. See Toledo woman charged for home loan-modification scheme.

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