New Jersey Loan Fraud

From Inman News:

Four plead guilty to New Jersey real estate loan fraud

A former real estate broker, loan officer, closing attorney and one of their employees pleaded guilty to a conspiracy to "flip" New Jersey properties and defraud the U.S. Department of Housing and Urban Development of more than $300,000, officials said.

Mario Mendoza, 41, of Union, N.J., was formerly a real estate broker with Weichert Realtors in that city; Kenneth DiPrenda, 42, of East Hanover, N.J., was formerly a loan officer at AMS Mortgage in West Patterson, N.J.; attorney Linda Serrano, 44, of Union, is a private-practice attorney; and Myrium Vaca, 45, of Elizabeth, is an Ecuadoran national and worked, at times, for Mendoza, according to U.S. Attorney Christopher J. Christie.
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According to the Informations, the conspirators fraudulently induced HUD to insure certain mortgage loans made to unqualified borrowers, enabling Mendoza, DiPrenda, Serrano, Vaca and their co-conspirators to earn hundred of thousands of dollars in profits from the sales of properties financed by the fraudulent loans, officials said.
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As part of the alleged conspiracy, the defendants and others solicited and recruited individuals who, with false identification, purchased homes in Union County, N.J., and elsewhere, officials said. Many of the homes were being sold by Mendoza's clients at Weichert, according to officials, and were duped into selling their homes to unqualified borrowers using fake identification.

According to the Informations, DiPrenda, a loan officer, assisted in qualifying the borrowers for HUD-insured loans, officials said. Further, Mendoza, Vaca and others falsified documents for the borrowers' loan files and then submitted the files to banks and, soon thereafter, HUD, officials said. The false documents included gift letters, credit explanation letters, W-2 form and employment records, according to officials.

As part of the conspiracy, Mendoza often told sellers that their properties were being sold for a price that, unbeknownst to them, was far lower – often by tens of thousands of dollars – than the amount that was ultimately financed through the fraudulently secured HUD loans, officials said.