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Shelley Osterloh Reporting
Utah is second worst in the nation for mortgage fraud. Experts say unscrupulous real estate deals are taking money home buyers and artificially inflating the price of homes. Real Estate industry experts, lenders, legislators and fraud investigators are meeting tomorrow to see what needs to be done to stop the fraud.
Mark Thurman has a mortgage on his own home in Syracuse. He had good credit and bought a brand new Draper home as an investment. Though the construction loan on the house should have priced it around 425-thousand dollars, the home was inaccurately appraised, he says, at 625-thousand dollars.
Mark Thurman Mortgage Fraud Victim: "They got an accelerated appraisal because it appraised a mile away, comparable with a house by the temple. That's how they got away with it."
A property investment group told him they had a California buyer for the home who couldn't qualify for the loan. They set up a lease to buy option, which sounded attractive to Thurman. He had to make no down payment, and he was to receive large monthly rental checks, which helped him secure the loan.
He was also promised the California buyer would purchase the house within 16 months, giving Thurman a profit on his investment.
Turns out there was no California buyer. Thurman is stuck with trying to pay the mortgage on his Syracuse home and the loans on the over-valued Draper home
Mark Thurman, Mortgage Fraud Victim: "My credit used to be 725, it used to be excellent. Right now I couldn't afford a down payment on a free lunch because my credit is so bad."
He says, since the price he paid was higher than its current value, he'll have to sell at a loss.
Sheri Fitzpatrick heads a group of industry experts working to tighten up loopholes in Utah's real estate laws. She says home buyers should work with licensed professionals and shouldn't trust just one person to organize the whole deal.
Sheri Fitzpatrick, CEO Perfect Home Living: "They are actually using your credit. You are not putting any money down, that's a red flag. If they tell you can get a loan, even if you are not employed or if the money that you are making, there is no way you could afford a payment on that house, that's a red flag."
She says investment groups also can falsely inflate property values by buying and selling a number of homes in one area, which may also cause property taxes to rise.
