Jeffrey Barry who was arrested in Houston, Texas, has been charged with five counts of obtaining mortgage proceeds under false pretenses in a mortgage fraud scheme.  Five fraudulent mortgages worth nearly a half-million dollars were involved.  He shall be extradited to Michigan.

Here is how Barry executed the scheme:  When a homeowner is already at risk of losing his or her home, Barry would approach him or her, offering his services as a “mortgage foreclosure rescue” agent.  He pretends to attempt saving their home from foreclosure by offering to buy it from the homeowner and selling it back to the homeowner under a land contract.  But then, the down payment is faked down by the defendant.  He does this by first giving a check to the homeowner but later retrieves it for different alibis, hence making the down payment an illusion.  Barry would obtain a mortgage from a bank under false pretense through the “down payment” as proof of his financial investment in the property.

Between January 2005 and May 2005, the five mortgages in question, worth a combined $451,707, were obtained.  As a result, Barry is charged with five counts of false pretenses over $20,000. Each count is a 10-year felony.

“Mortgage fraud is a serious threat to Michigan’s economy,” said Cox. “Crimes like these are a major contributor to the declining housing market that is ruining family finances.”

Charges were filed in 65A District Court in St. Johns, even though the properties are located in Jackson, Haslett, Eaton Rapids, Durand and Battle Creek, Michigan.  This is because closings for the sales took place in Clinton County.  After receiving a referral from the Office of Financial and Insurance Regulation, the Attorney General’s office and the Michigan State Police began investigating Barry.

Cox also said, “I would like to thank the Michigan State Police and the Office of Financial and Insurance Regulation as we continue working together to tackle mortgage fraud in the State of Michigan.”