Mortgage Schemes' Need For Loan Management Software

A case involving a fraudster who acted as a straw buyer of 15 homes in Wisconsin and provided false information on mortgage documents has now reached the Supreme Court.

Federal prosecutors allege that Benjamin Robers “claimed that he would live in the mortgaged properties as his primary residence and make loan payments,” but those loans later defaulted. Robers was ordered to serve three years probation and to pay $218,900 to the defrauded mortgage company, under the Mandatory Restitution Act of 1996.

“Robers served as a straw purchaser for only two houses – one on Grant Street in Lake Geneva and the other on Inlet Shores in Delavan. For his role in the scheme, Robers received a mere pittance – about $500 for each loan,” 7th Circuit Court Judge Daniel Manion explained last year.

The Supreme Court agreed on Monday to hear the case.

Former NFL player facing charges of mortgage fraud

A former wide receiver for the Philadelphia Eagles, Irving Fryar, has also been indicted for a similar offense. Fryar and his mother are accused of defrauding banks out of nearly $700,000 through a home equity loan scheme. The pair used false information to obtain five fraudulent loans from lenders.

“This indictment alleges that they engaged in an elaborate criminal scheme that was designed to defraud these banks of hundreds of thousands of dollars,” acting attorney general John Hoffman said.

As both of these cases show, deceitful borrowers are constantly looking for new ways to defraud lenders, and they are often successful. Lenders need to protect themselves through comprehensive risk management strategies and loan management software that can sufficiently vet potential borrowers.