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Alleged Mortgage Scam Busted

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Illinois officials say they’ve broken up a massive mortgage fraud ring, involving more than a hundred properties. Chicago Public Radio’s Gabriel Spitzer reports.

Officials say the scam usually began with a conman approaching a homeowner.

He’d buy the property cheap. Then he’d get a crooked appraiser to say the house was worth much more.

They’d sell the house to a sham buyer, who’d get a loan for the inflated price. He’d never make any payments, and all the parties would divvy up the loan money.

Dean Martinez, Secretary of Financial and Professional Regulation, says the houses would often be flipped within hours of the original purchase.

MARTINEZ: Some of the properties actually were sold twice or three times in a day. So it would be sold at nine, then sold at 12, then sold again at three, each time escalating the price by hundreds of thousands of dollars.

Martinez says the state is pulling licenses and levying fines against at least 17 individuals and businesses. They also face possible prosecution.

Calls to a number of those accused of wrongdoing were not immediately returned.

I’m Gabriel Spitzer, Chicago Public Radio.

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