AUSTIN – A Dallas Grand Jury indicted five individuals on felony charges for a mortgage fraud scam involving 10 residential properties with a total value in excess of $2 million. Two of the individuals had previously been licensed escrow officers. The indictments were the result of an investigation by the Dallas County District Attorney’s Office and the Texas Department of Insurance’s (TDI) Fraud Unit. TDI is the state regulatory agency responsible for licensing title insurance companies, title agents and escrow officers.
The scheme involved convincing “straw buyers” with high credit scores to purchase one or more properties. The straw buyers were promised that they would not have to make any payments because the properties would be leased and the mortgage payments would be made paid by a renter. However, after the closings, the buyers found that the properties were left unoccupied and/ or the payments were not made. The buyers were left holding mortgages that were often higher than the true value of the properties.
Last session, the 80th Texas Legislature took action to address mortgage fraud by creating the Texas Residential Mortgage Fraud Task Force under House Bill 716, authored by Rep. Burt Solomons (R-Carrollton) and Sen. Kip Averitt (R-Waco). The 2007 legislation was intended to reduce false or misleading information on residential home loan applications by increasing cooperation among regulators, requiring new disclosures at closing, and warning of possible penalties for acts of residential mortgage fraud.
For more information:
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If you have questions about insurance, call TDI’s Consumer Help Line toll-free: 1-800-252-3439 or visit the TDI website: www.tdi.state.tx.us
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To report a case of suspected insurance fraud to TDI, call 1-888-327-8818.
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If you have an insurance-related complaint, we may be able to help. You may file a complaint with TDI by calling the toll-free Consumer Help Line, filling out an online complaint form on TDI’s website, or emailing TDI at: ConsumerProtection (at) tdi.state.tx (dot) us
