Three of the individuals, Dequincy Hyatt (of Detroit), Seaesther Thompson-Hayes (of Flat Rock), and Aaron Brooks, Jr. (of Southgate), were each charged with racketeering, a 20-year felony, plus two counts of false pretenses, each a 10-year felony.
The fourth individual, Pietro Biundo (of Washington, Michigan), was charged with one count of false pretenses for filing a falsified deed in the sale of one of the homes involved in the scheme, which is a 5-year felony.
In 2006, Dequincy Hyatt, managing partner of J.B. Homes/Construction, LLC., Seaesther Hayes, a mortgage broker, and Aaron H. Brooks, Jr., a former service representative for the People's Trust Credit Union, partnered together to pull off a mortgage fraud scheme on two high-end Michigan properties.
Apparently in the first case, these guys sought out a "straw buyer" to secure a $710,000 mortgage on a $510,000 home in Shelby Township, MI, which allowed them to walk away from the transaction with about $163,000 after everything was all said and done.
And in the second case, they again used the same straw buyer to secure a $785,000 mortgage on a $515,000 home in Clinton Township, MI, but it wasn't disclosed how much they walked away with on the deal.
The straw buyer was told that her name and credit, which was boosted by grossly inflating her income and asset data, would be used to purchase the properties, and in return, she would receive compensation. The mortgage payments were supposed to be made by the group on her behalf, with her name to be removed from the mortgages at later date.
However, about a year after the transactions, the mortgage payments stopped, and the straw buyer was left with two mortgages in her name that she was not able to make payments on, which resulted in both houses going into foreclosure.
Not unique to Michigan, this type of mortgage fraud occurs all over the country. And sadly, these fraudulent activities hurt nearly every loan-seeking consumer in some form or fashion.
It's the trickle-down effect... so many bad, fraudulent transactions pass through the pipelines that sooner or later, lending starts to dry up, and it gets much harder for decent, honest, law-abiding consumers to obtain credit and loans.
Look at the situation we're in now!
Thankfully, there are a growing number of targeted task forces across the country dedicated to removing the bad mortgage and real estate actors from the marketplace, so the rest of us can buy, sell and finance our homes in peace.