While honest people were turning to sub-prime loans over the last decade, a group of criminals in California opted for FHA. According to reports, 6 people have been indicted in a mortgage fraud scam that ran from 1997-2002. The San Bernardino Country Sun reports:

The indictment accuses the defendants of submitting fraudulent loan application documents in order to qualify the loans for FHA insurance.

“The program was intended to help low-income borrowers qualify for loans,” Pym said.

The companies would not normally qualify for the types of loans and the insurance, Pym said. But they falsified all the documents used in the application of the loans.

“They made up (applicants) entirely,” Pym said.

It is estimated that the fraud stole over $10 million from the FHA. Now that FHA is back in the mainstream, criminals will be unlikely to get away with this type of scheme for as long as these crooks did!

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