US Charges Five With Bank Fraud in Iowa Short Sales
By Associated Press
IOWA CITY, Iowa (AP) A Des Moines attorney and four businessmen are charged with fraud for allegedly deceiving banks into approving short sales on homes that were purchased at steep discounts and immediately resold for profit.
The charges are filed against attorney Jason Springer, business partners Nathan Smith and Patrick Steven, real estate agent Rick Makohoniuk and mortgage broker Jerod Hogan.
A federal indictment says the scheme involved 19 Des Moines-area homes.
Struggling homeowners contacted a company owned by Smith and Steven for help negotiating short sales in which homes would be sold for less than what was owed.
Smith and Steven then used another company to purchase them below market value. They would resell the homes the same day, without banks’ knowledge, for a higher price.
Springer conducted the closings and received commissions.