Three real estate investors, two local mortgage brokers and a former local attorney have been indicted for allegedly using fraudulent documents to defraud homeowners and mortgage lenders in real estate transactions involving 26 distressed properties in Greater Boston.
From the Banker and Tradesman: Brown, Frank and Sweetland conspired with mortgage brokers Defeo and Arrington to submit loan applications to financial lending institutions with false information in order to secure 100 percent financing for the homebuyers’ purchases, the attorney general’s office said. Authorities believe that Boston Equity Investments (BEI), with Arrington’s assistance, inflated borrowers’ incomes and savings, misrepresented where and for how long the borrowers had been employed (if the borrowers were employed at all), and falsely stated that the borrowers intended to use the properties as primary residences instead of as investment properties (many of the borrowers lived out of state).
BEI also allegedly deposited money into some of the homebuyers’ bank accounts to make it appear as if they qualified for mortgage loans. Defeo and Arrington allegedly rushed the homebuyers through the loan application process and told them that they did not have to disclose all of their debts to the lenders.