Cash Back at Closing? Anatomy of a Mortgage Fraud
Jill Lehn, a Minnesota Closing Officer/Realtor discovered the dark side of "Cash Back at Closing" when the FBI showed up, pulled her license, and she was arrested. She now faces 20 years in prison for felony loan fraud for falsifying loan docs to provide cash back at closing to "investors" and other home buyers. News story at http://www.realcities.com/mld/pioneerpress/16700613.htm
We've all heard about all the foreclosures happening lately. Behind most every foreclosure, especially for investment property, is someone who over- or under-stated something and/or bent the rules to make the loan happen. This case is a heads up to anyone planning to manipulate the lender system to their advantage. The buyers allegedly always knew what was going on, but they conspired with Lehn to hide the information from the lender.
Federal officials say their investigation goes far beyond this one case in this one state, and promise more investigations and arrests. Ms. Lehn's own story and confession, as published in Minnesota Realtor magazine, is at http://www.mnrealtor.com/publications/pdfs/TipsRuinYourLife.pdf
or google "jill lehn" for more info. Bit of a wake up call to anyone testing the frontiers of the lender system to see what they can get away with.
This story is a real wake up call. I didn't know mortgage brokers could get into so much trouble.