Unwitting Home Seller Conned By Alleged Mortgage Scammers Into Holding Subordinate Carry Back Note Now Faces Having Equity Wiped Out

In Seattle, Washington, The Seattle Times reports:

• Tom Backman says the deal to sell his house in Pacific two years ago seemed fishy from the get-go. The real-estate agent was hard to reach and demanded a specific escrow closer. The actual buyer was never around. Still Backman, who had already moved to rural Idaho, wanted to get the deal closed. He even agreed personally to loan the buyer $53,500 to seal the sale. But the loan payments quit coming. The house fell into foreclosure. Then one day, federal agents told him he might have been the victim of an elaborate mortgage-fraud scheme.(1) Now Backman worries that if he doesn't get his money back, he'll lose his current home.

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• [I]n this case, the defendants in some instances got unwitting home sellers to extend their own private loans — called "carry-back notes" — to the phony buyers, the prosecutors say. The sellers lost it all when no one paid on the primary bank loans and the homes were foreclosed.

• Backman said that's exactly what happened to him. He had been counting on it to fulfill a short-term loan he took for the down payment on his current home. Now he has to come up with $50,000, or he's in real trouble.

For more, see Five nabbed in alleged mortgage-fraud scheme in Pierce, King counties.

For the U.S. Attorney (Washington State - Western District) press release, see FIVE ACCUSED IN MORTGAGE FRAUD SCHEME THAT CHEATED BANKS AND PROPERTY SELLERS (Real Estate Agents, Mortgage Loan Originators, and Escrow Company Employee Conspire in $18 Million Fraud):

• [I]n this scheme, the conspirators did not just damage banks and financial institutions. Innocent sellers were harmed when they agreed to loan the buyer a portion of the purchase price, to be paid back over time. The sellers did not know that the conspirators had already obtained 100 percent financing from commercial lenders. When payments were not made and properties fell into foreclosure, and then were sold for less than the total of all loans secured by the property, the sellers holding private notes were left with nothing.

(1) The prosecution documents allege the conspiracy involved dozens of falsified real-estate sales used to scam banks and innocent sellers all over King and Pierce counties out of at least $18 million in at least 80 loans. Indicted were real-estate agent Humberto A. Reyes-Rodriguez, 42, of Federal Way — known to Backman and others as Tony Reyes; real-estate agent Alexis Ikilikyan, 29, of Auburn; Ikilikyan's ex-husband, William S. Poff, 37, of Michigan; Micki S. Thompson, 54, an escrow agent from Tacoma; and Mario A. Marroquin, 38, of Kent.