Fraud for Dummies

After two big-time politicians were accused last week of crimes related to mortgage fraud, everyone in town seemed to be asking the same question: How can I get in on this action?

Kansas City Councilwoman Saundra McFadden-Weaver and mayoral candidate Katheryn Shields both face federal indictments in unrelated mortgage-fraud investigations. They follow former Kansas congressional candidate Adam Taff, who went down in 2004 for the same thing. Finally it seems like a few politicians actually know something we regular folk don’t.

So here’s a three-step guide to committing some popular mortgage frauds.

1. Find yourself a mark, some unsuspecting idiot who will agree to wreck his credit the way an indictment can ruin a campaign. To pull off what Shields and hubby are accused of doing, you’ll need your dolt to agree to buy your home for an inflated price. You’ll also need something that Shields is accused of using — a crooked CPA to give your dumbass a good credit report. (Hey, how hard is it to find a CPA who’s willing to fudge the facts a bit?) In the end, you sell your home, everyone splits the profits and only the stooge loses, getting stuck with a home he can’t afford. But, you know, he had it coming.

2. Locate a naïve homeowner (say, McFadden-Weaver). Offer this trusting (or unscrupulous) soul free home repairs if she’ll simply sign a home-equity loan. Or, as McFadden-Weaver is accused of doing, have her cosign for a loan on another home and swear that she’ll live there. Typically, this ends with the repairs never completed and the homeowner paying a mortgage with lots of hidden fees and big-ass balloon payments.

3. Find yourself an unscrupulous appraiser to help you flip a few shacks. In an industry with little regulation, that’s not hard. Then buy a run-down crib and immediately put it back on the market for double the price. Find yourself an idiot (see No. 1) to sign for a loan and have your appraiser claim that your “repairs” doubled the value of the place.

The final step, completed as you drink piña coladas in Cancun, is to figure out how to live with yourself.

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