Five charged in alleged mortgage fraud schemeby Brandt Williams, Minnesota Public Radio
Minneapolis — The Hennepin County Attorney's office has filed a $5 million lawsuit against a Brooklyn Park mortgage company and five employees.
The suit alleges that employees of Universal Mortgage engaged in racketeering and theft by swindle in a scheme to flip 24 houses, mostly in north Minneapolis.
Hennepin County Attorney Mike Freeman says Universal Mortgage used straw buyers to purchase the homes, and falsified documents to help them qualify for the loans.
"These guys, after they use the straw buyer to buy a house, and they get some tenants in there. And the tenants don't realize the frauder -- the person who recruited the straw buyer -- not only collects a piece of action when the house is sold, but is collecting the rent but not paying the mortgage," says Freeman.
Freeman says 23 of the 24 homes involved in the scheme went into foreclosure.