New federal mortgage fraud indictment in Atlanta
A new mortgage fraud indictment was returned in federal court in Atlanta last week.
The new indictment alleges a mortgage fraud scheme involving the purchase of condos on Memorial Drive in Atlanta. The government alleges that the scheme involved fraudulently inflated appraisals. One of those charged is a former IRS employee.
The Atlanta Journal Constitution has the story.
There have been several large federal mortgage fraud prosecutions in Atlanta over the past few years. Our firm has been involved in many of them. We have represented closing attorneys, mortgage brokers, appraisers, investors and the inevitable "straw buyers." The alleged losses have been staggering, usually in the many millions of dollars.
While the government has been mostly successful in these prosecutions, defense lawyers who have represented defendants in these cases often try to point the finger at the lenders who were accepting obviously false loan applications and inflated appraisals without question. There's no doubt that mortgage lenders had a role in the rampant fraud that plagues the residential mortgage industry, especially in the so-called "sub-prime" market. The lenders were approving loans left and right with little concern if the borrowers later defaulted. While that sounds strange, the fact is that most lenders sell the mortgage on the secondary market shortly after the borrower closes on the property. At that point, it's someone else's problem.
But a false statement is still a false statement, and we expect both federal and state prosecutors in Georgia to continue to purse mortgage fraud indictments. There is certainly no shortage of foreclosed properties to review.
