Home buyers duped into foreclosure [South Florida]
The beige ranch house at 4501 SW 13th Ter. looks much like any other on this ordinary street in the Little Gables neighborhood.
But it’s one of a string of homes bought for more than $7 million in suspicious mortgage deals orchestrated by the former co-owner of a South Beach talent agency and her husband. The deals wrecked the credit of at least five people and sent eight homes into foreclosure, one of them twice and another three times.
The story of 4501 SW 13th Ter. comes amid what police call an epidemic of mortgage fraud that spread during South Florida’s real estate boom, when the money was easy and the deals flew fast. Florida leads the nation in mortgage fraud, which flourishes because of cracks at every stage of the system, according to a Miami Herald analysis based on hundreds of documents and dozens of interviews.
Here’s how it usually works. Small cartels of inside players recruit people with good credit as decoy or straw buyers. They inflate the price of a home to get a bigger loan, sometimes with the help of an appraiser. Then they pay the sellers at their original price, pocket the rest of the money as cash back at closing, and abandon the home to foreclosure.