MORTGAGE LOAN COMPLIANCE®

According to John J. Tuchi, interim U.S. attorney for the District of Arizona, participants in a real estate scheme recruited unqualified straw borrowers, submitted fraudulent loan applications on their behalf, obtained mortgage loans in excess of the selling price and then took the excess amount of the loans out through escrow.

Mario Bernadel, a real estate investor from Phoenix, has been convicted of running a mortgage fraud scheme involving at least 32 residential properties in the greater Phoenix area. Bernadel is the 20th defendant to date who has been convicted. U.S. District Judge Stephen M. McNamee set sentencing for late November.

Bernadel recruited and trained mortgage brokers, straw buyers and an escrow officer in the scheme and, following the funding of the loans, received cash back. Seven other co-conspirators were also charged and have pleaded guilty and await sentencing.

The homes purchased through the scheme have been foreclosed or sold at a loss. The scheme resulted in $20 million in loans obtained by fraud and a loss of more than $2 million.

Bernadel's conviction is part of "Operation Cash Back," in which 40 defendants were indicted and arrested.

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