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Indian Among 6 Charged In $30 Million Bank Fraud
The warehouse lenders relied on Wider and HTFC to ensure that home buyers were able to pay the mortgages and that the market value of the homes fully collateralised the loans.
Instead, Wider and the co-defendants allegedly engineered a complex series of same-day sham transactions, or “flips”, to artificially inflate the prices of homes.
They then lied to the warehouse lenders to obtain mortgage funding that was 80 percent more than the actual value of the homes, according to court filings.
“The conduct charged in the indictment is a prime example of the type of corrupt mortgage-lending practices that preceded the bursting of the real estate bubble, the loss of faith in securitised mortgage obligations and the financial collapse of 2007 and 2008,” U.S. attorney Loretta Lynch said.
“Instead of using their skills in banking, the law and investing to assist individuals pursuing the American Dream, the defendants cooked up a sophisticated scheme that defrauded lenders and then fed toxic debt to the investigating public at large in the secondary mortgage market,” he said.
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Source: PTI
