Louisville lawyer Ronald Snyder, brother of the late Kentucky U.S. Rep. Gene Snyder, admitted that he rented out a condominium owned by a deceased man, Robert Cornett, for nearly 12 years, pocketing around $15,000 in rental payments during that time.
But Snyder isn't the only one getting nailed for a scam involving real estate. Earlier this month, a ring of mortgage brokers in Southern Florida was busted for a fraud scheme. A Maryland owner of modular-home construction business was indicted this week for mortgage fraud. And in the foreclosure-plagued state of Arizona, June was the highest month ever for mortgage fraud indictments.
In fact, The Wall Street Journal reports that mortage fraud is on the rise again nationwide. According to data prepared for the news daily by the research firm CoreLogic, mortgage fraud climbed 17 percent last year, after dropping 57 percent over the two previous years from an all-time high in 2006.
From identity theft, to falsifying application information, to manipulating appraisal numbers, the types of fraud schemes are also becoming more complicated. In response, the Federal Bureau of Investigation is widening its net: The number of pending mortgage fraud investigations jumped 71 percent from 2008 to 2009.
The Courier-Journal in Louisville reports that Snyder's lawyer, Charles E. Ricketts Jr., explained his client's actions by saying that no relatives attended the funeral for Cornett, and as a family friend, Snyder maintained the property after Cornett's death. Snyder kept the property in Cornett's name, rented it out and received rental payments from tenants via U.S. mail.
Snyder's wrongdoing, according to the Department of Justice, was that he "knowingly" failed to either locate Cornett's heirs or turn over the property, valued at $91,060 in 2006, to the state of Kentucky. When Snyder attempted to benefit from lower property taxes granted to those over 65 years of age in most states, the Louisville police uncovered his decade-long scheme.
The case is closed on Snyder, but the growing problem of mortgage fraud -- which is projected to cost at least a $14 billion this year --may mean more trouble on the horizon for the already rocky housing market.
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