A HOME INSPECTION IS ONE WAY TO HELP AVOID FRAUD... 20 ARE CHARGED IN FRAUD SCHEME UNDERCOVER OPERATION BEGAN 2 YEARS AGO CHRISTY ARBOSCELLO FREE PRESS STAFF WRITER Federal authorities have cracked what they say was a mortgage fraud scheme that stretched across metro Detroit and cost financial institutions millions of dollars.

Twenty people - 19 from the Detroit area and one from California -were charged Tuesday. According to the indictments, individuals worked in cahoots with loan officers, appraisers and straw buyers (legitimate purchasers who knowingly or unknowingly put their names on these fraudulent deals) to obtain money - often letting properties wind up in foreclosure and forcing unsuspecting financial institutions to foot the bills. "They don't have any interest in the homes," U.S. Attorney Stephen Murphy said. "It's a vehicle for getting some money from the bank." Instead, officials said, the suspects found ways to boost the appraised value of homes and keep the cash for themselves. Here's how the scheme worked in some cases: Someone would arrange for an inflated appraisal of a home. Using that exaggerated value, a straw buyer would get a mortgage for that amount from a loan officer in on the deal. Much of the money would wind up in the pockets of those involved in the deal. The person orchestrating the deal might also provide down payments and forge documents to straw buyers to bolster their credit ratings. Some even made some payments after the loan closed in hopes of concealing the fraud, according to federal records. Often the properties ended up in foreclosure. DISCLAIMER: THIS ELECTRONIC VERSION MAY DIFFER SLIGHTLY FROM THE PRINTED ARTICLE

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