An article today at NewsDay.com highlights a good example of the type of activities that crippled the mortgage industry.
A New Jersey man has pleaded guilty in a mortgage fraud and property-flipping scheme involving rental properties in Paterson.
At his plea hearing Tuesday in federal court in Newark, 47-year-old Renford Davis of Paterson admitted conspiring with several co-defendants by recruiting borrowers to purchase two- and three-family homes in Paterson and providing false verifications to help them qualify for mortgage loans.
Prosecutors say Davis and others received substantial portions of the fraudulent loan proceeds after the closings.
Davis pleaded guilty to one count of wire fraud conspiracy and one count of money laundering conspiracy. Under federal sentencing guidelines, he faces between 30 and 37 months in prison. He will also be required to pay restitution to the victims.
The article really doesn’t state who the “victims” were in this case or if any of the co-conspirators were convicted as well. In the case of the borrowers, they should have been well aware of their own financial situations and acted wisely.
One of the tasks a mortgage broker is often faced with is assisting a potential borrower with cleaning up their credit rating. It’s no surprise that situations arise where a broker knows a borrower with an impeccable credit rating just can’t realisticly afford what they wish to purchase. Property flipping is at the heart of the mortgage crisis and accounts for an increasing number of forclosures.
Tagged: Mortgage, New Jersey
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