Consumer Law

$70 Million Mortgage Scheme

By M. Stan Herring

Associated Press' Matt Apuzzo has written an article about a "nightmare mortgage" scheme.

Around 1,000 people in Maryland were tricked into paying a combined total of roughly $70 million to a company that promised to use the revenue from their money to pay off their mortgages. An upfront investment fee of $50,000 was required for each house. A $100,000 investment got the customer a seat on the "Junior Board of Directors."

Investors were told they were investing in ATM machines, television advertising and calling card kiosks that would raise money for the mortgage payments. But prosecutors say the businesses never made any money.

Instead, prosecutors say the investments were used to pay company salaries of up to $200,000 and maintain a fleet of luxury cars and a staff of 10 chauffeurs. And company officials allegedly traveled to the Super Bowl and the NBA all-star game with investor money.

The individuals responsible for the scam had businesses that went by several different names, such as Metro Dream Homes, Metropolitan Grapevine LLC and POS Dream Homes. Officials believe they have all of the schemers' names.

If you have had problems with mortgage fraud, feel free to contact us.

Full post as published by Alabama Consumer Blog on May 06, 2009 (boomark / email).