Industry NewsMortgage

Dozens indicted in Chicago mortgage schemes

Five cases involve straw borrowers, inflated appraisals

Federal prosecutors have filed charges against 37 people and four businesses in the Chicago area in five separate mortgage fraud cases involving "scores of homes" and more than $48 million in allegedly fraudulent loans.Defendants include a vice president of the title company, mortgage brokers, loan officers, real estate investors, appraisers and an attorney, the U.S. Attorney for the Northern District of Illinois said in a press release.Prosecutors called one of the cases, United States v. Lisnek, et al., "one of the most comprehensive mortgage fraud schemes ever charged" in Chicago. From 2002-07, prosecutors alleged, 15 defendants and four businesses were involved in the purchase of 70 homes that were made "camera ready" with cosmetic repairs to their exteriors and then resold at "fraudulently inflated" prices two to three times the purchase price. Lenders incurred approximately $5.8 million in losses after being forced to foreclose on the prope...