Sting Busts Mortgage Scam

The two men that met the suspect were not interested in making a quick dollar. One was a government informant, the other a Secret Service agent. The agent secretly recorded discussions between all the men where the suspect would get an inflated mortgage on a house in a Chicago’s neighborhood. The man brought in a licensed appraiser who was in on the scam and who would appraise the house at much more than it was actually worth.

Mortgage fraud was responsible for more than $1 billion in lost money in 2005. The government is forced to become more and more creative in catching the fraud, since the crime evolves to escape notice. The appraiser would give an inflated value, the seller would take a cut, and the borrower would obtain a mortgage for the inflated amount. The buyer would make a few payments, then default on the payments and walk away with a payoff. All involved would have come away with a profit; instead, the suspect and the appraiser walked away with jail time. The suspect was arrested at the closing table.