Mortgage Fraud ... What is it?

ONLY IN INDIANA???

When you wonder why our foreclosure numbers are so high and why so many mortgage funding companies are having trouble these days you will now remember this story and have your answers. As reported in the Real Life section of the January 2008 issue of Realtor Magazine:

Headline: Scamming the Mortgage Scammer

Mortgage fraud has become all too prevalent in some areas as buyers and sellers struggle with a volatile financial market. But you know things are getting surreal when one party to a fraud scheme is scammed by another – and then tries to sue and recover damages.

Fortunately the 8th U.S. Circuit Court of Appeals put a stop to that. In the case, Michael Stapleton proposed to Trent Decatur that Stapleton would locate undervalued houses, which he would arrange to have appraised at twice their value. Decatur in turn would borrow an inflated amount from a mortgage broker who was part of the scheme. Decatur was supposed to receive rent from the properties while Stapleton used the extra funds to renovate and find tenants. Instead, Stapleton and the appraiser split most of the money left after purchasing the house and stopped paying Decatur rent after a few months. Decatur sued them for fraud and negligence.

After a trial court dismissed the case, Decatur appealed, claiming that Stapleton and the mortgage broker were his agents. This, said the court, was “loopy.” It also rejected Decatur’s claim that the appraiser was guilty of negligence since Indiana law states that a professional cannot be liable for information provided indirectly to a third party (in this case, the bank). Just proves you can scam a scammer.

By Mariwyn Evans

AVENUES thanks Mariwyn for publishing this ridiculous circumstance. It just goes to show you how these people think. They have no clue that they are doing something illegal. Perhaps because the same court that dismissed the case did not notify the authorities of the blatant fraud that was not only admitted but well documented by the person who comitted the crime. Come on, can we enforce the law on these things???