Arrests in Scams combining ID theft and Mortgage Fraud

ID theft scams are quite common in the credit industry. But the real estate and mortgage industry isn’t devoid of its ill-effects. In one such incident, an Orange County resident was denied a personal loan by his credit union just for the reason that his credit report showed that he was 6 months behind on mortgage payments on a $660,000 home in Oceanside.

However, the fact is, the Orange County man has never bought a house in Oceanside. So, he contacted the police for investigation and they found that someone has stolen the person’s identity to purchase the home with a mortgage in October 2006.

In another incident, a house on Overlook Drive is in foreclosure. The real estate agent involved in the transaction, Robert Decker, has been taken in custody. Decker’s company was allegedly paid $37,000 in commissions and he has been charging $18000 in rent on a monthly basis from his tenants. Apart from Decker, others who have pleaded guilty are the notaries involved, a mortgage broker and an Orange County man who provided personal information of the 2 patients whose identity have been stolen by Decker and others.

Scams such as the above are one of the many to have started during the housing boom. Some of the scams include inflated appraisals, zero-down financing, false information on loan documents etc. The purpose behind the scams is not to own property on a long term basis but earn as much money as possible through commissions, rental income and undisclosed cash kickbacks before the home is foreclosed.

With the foreclosure crisis deepening, such frauds are gaining momentum. Last month, prosecutors charged 6 people from San Diego mortgage and real estate firm with wire fraud as part of a nationwide crackdown on phony real estate transactions. The investigation called Operation Malicious Mortgage led to arrest of 400 brokers who are responsible for a loss of $1 Billion as estimated by the FBI and Justice Department.