Industry NewsMortgage

8 sentenced in fraud scheme

Indianapolis ring used FSBOs, other properties to obtain $16.6M

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Eight people have been sentenced to serve a total of 26 years in prison -- or an average of three years, three months each -- for their roles in an Indianapolis, Ind.-area mortgage fraud scheme that prosecutors said involved at least 136 fraudulent loans totaling $16.6 million.Of those loans, 39 mortgages totaling more than $7 million were used to purchase properties from individual sellers -- usually individuals who either did not have their homes listed to sell or who listed them as "for sale by owner," prosecutors said.The remaining 97 fraudulent loans, totaling $9.3 million, were used to purchase duplexes in the Windsor Village neighborhood on the east side of Indianapolis.The scheme involved purchasing properties at fair market value, usually by means of an option agreement or unrecorded land contract, and reselling them at much higher prices to straw buyers who used their good names and credit to obtain loans but contributed none of their own money to the deals.False...