Industry News

Mortgage broker defrauds lenders, goes to prison

Fraud scheme brings foreclosures, impacts property values

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A former mortgage broker in Charlotte, N.C., has been sentenced to five years and five months in prison after pleading guilty to conspiring to defraud mortgage lenders through an elaborate home-selling scheme. Gordon George, 37, convinced buyers to purchase homes at inflated prices by promising to provide renters who would make the mortgage payments before selling the homes at a profit, prosecutors said. George and his co-conspirators provided false information to lenders to secure loans on the properties, pocketing excess loan proceeds of about $7 million, said U.S. Attorney Gretchen Shappert. Many buyers lost their houses to foreclosure. A 2003 investigation by the Charlotte Observer found a 60 percent foreclosure rate in one subdivision targeted by George, and property values declined for every house in the neighborhood, the paper reported....