Industry NewsMortgage

Five lose licenses in ‘builder bailout’ scheme

Group recruited straw buyers for 220 sales in Minnesota

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A mortgage originator is accused by Minnesota authorities of recruiting straw buyers in a "builder bailout" scheme involving the purchase of about 220 new homes at "substantially above" market value in the state's fast-growing areas including St. Cloud, Eagan, Rochester and Otsego. The Minnesota Department of Commerce has revoked the mortgage originator license of Michael Prieskorn and fined him $2.2 million for his involvement in the alleged scheme, which allowed his company, Maine Estates, to collect "management fees" ranging from $22,000 to $105,000, authorities said. Officials said they have been unable to locate Prieskorn, and that he failed to appear at a Dec. 17 administrative hearing. Prieskorn allegedly emptied his bank accounts in April 2007, and stopped making payments on the homes, most of which have fallen into foreclosure. The Department of Commerce said it has taken action against four other real estate professionals accused of ...