Industry News

Mortgage broker jailed for 10 years in flipping scheme

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The first of five people to be sentenced in a Los Angeles-area property-flipping and mortgage fraud scheme that resulted in $6 million in fraudulent loans has received a 10-year prison sentence. James Davis Bennett, 53, who owned several real estate companies in Anaheim Hills, was accused of buying multiple-unit rental properties in distressed areas of Los Angeles and Long Beach. He purchased the properties in cash in the name of his mother, wife and stepson, selling them to straw buyers at inflated prices. Bennett was convicted of preparing fraudulent loan applications for straw borrowers who otherwise would not have qualified for the loans, which were typically for about $100,000 more than Bennett paid for the properties. Lenders were led to believe borrowers had made significant down payments on the properties, which they had not. In January, a jury found Bennett, who acted as the escrow officer on the transactions, guilty of four counts of wire fraud and six counts of bank frau...