Another Real Estate Investor Investigated for Mortgage Fraud
A Kalamazoo man (Rodney Hixon) is under investigation for mortgage fraud. He apparently purchased 38 homes in a 22 month period. Local investigators are claiming that he may have committed mortgage fraud. Lenders are claiming that they have been left with 3.5 million in debts for the loans. If that is correct, under the Federal Sentencing Guidelines, Mr. Hixon is facing 57-71 months in prison on the mortgage fraud charge in Federal Court. The question that I have is why would anyone lend this gentleman all this money in such a short period of time. There is some serious injustice with this concept. Companies lend all this money hoping to make a wind fall on the loans and then when loans are not paid they call the FBI and cry fraud. These lending companies had an obligation to check the borrowers information and confirm all documentation that was provided. The exception to this is when the lending company is the victim of an elaborate mortgage fraud scheme. A good criminal defense lawyer will investigate the information and be able to determine if the mortgage fraud scheme was perpetrated on the lender or was lack of carrying on behalf of the lender.
The Federal Bureau of Investigation (FBI) keeps records related to mortgage fraud and the following information is amount of fraud they say has increased since 2002.
2002- 5,623 Cases, with $293 million in losses.
2003- 6,936 Cases, with $225 million in losses.
2004- 17,127 Cases, with $429 million in losses.
2005- 21,994 Cases, with $1.0. billion in losses.
2006- 35,617 Cases, with $946 million in losses.
There are no statistics for 2007 as yet. The amount is surely going to be highest ever. There is also going to be a sharp increase in investigations. The FBI has assigned over 100 agents to mortgage fraud in the past several months.
The inner workings of a mortgage fraud scheme. In South Carolina, Florida and some areas of Georgia, the value of real estate doubeled, tripled and even quadrupled in some markets. Some of this rise in value was legitimate and others were mortgage fraud. The government alleges that many fraud schemes begin with a property owner obtaining a fraudulent appraisal which establishes an over inflated value for the property. The property owner then sells the property to a so called straw buyer (no legitimate). The fake buyer gets a loan from a lender for the over inflated price. The buyer gives the proceeds of the loan to the seller who in turn gives the buyer back money from the sale. At times the appraiser and a mortgage broker also get a cut back. This mortgage fraud scheme is truly against federal law and violates several other federal statutes. However, there is also a real risk that an innocent seller caught in a hot market will be indicted for completely legal conduct. The government only needs the buyer to point the finger at the seller and we now have a conspiracy to defraud a lender. As I have stated before, in our system you are guilty until proven innocent. The government will move forward on a federal indictment based on the statements of only one person. If you are accused of mortgage fraud you need to contact our office immediately. You must prepare to defend yourself and protect your assests from forfeiture proceedings. The Government may seek to forfeit any assests (especially real estate) on a mortgage fraud indictment. Appraiser fraud is not as common of an indicted crime. The apprasier is usually used as a witness against the mortgage broker and seller of the property. Mortgage broker fraud is a common indictment and is always accompanied by other counts for wire fraud, mail fraud and money laundering.
