Saturday, May 19, 2012

Duo Get 3 Yrs In Scam That Left Home Buyers w/ Loans On Homes That Didn't Exist; One Victim Gets 'Debt Forgiveness' 1099 For Money She Never Borrowed

In Myrtle Beach, South Carolina, The Sun News reports:

  • Former Conway manufactured home dealer Glenn Vaught and his mortgage broker accomplice, Michael Fortenberry, will spend the next three years in federal prison for their roles in a fraud scheme that cost two banks more than $1.5 million and left prospective buyers with six-figure loans on homes that didn’t exist.

  • Vaught and Fortenberry were sentenced last week after pleading guilty to one felony charge each of conspiracy to commit loan application fraud in a case that was first brought to light after an investigation by The Sun News in 2006.
  • That’s good news, but it’s not enough,” said Brenda Myers, one of the victims of the fraud. Myers thought she was buying a home from Vaught’s G&E Home Center in 2006. She learned a few months later that Vaught had taken proceeds from the $129,000 mortgage he helped to arrange but never ordered her home. By early 2007, Myers was getting past-due notices from the mortgage company for a home that did not exist.
  • Vaught was supposed to order manufactured homes for his buyers and then close on the loans after the homes were set up on land and ready to occupy. Instead, Vaught told banks the homes were ready even though they had not yet been ordered.
  • Vaught and Fortenberry split the money they got from banks and never ordered homes for their customers. That left buyers with 30-year mortgages for homes that did not exist, creating a credit nightmare for some customers that continue to this day.

  • Myers, for example, moved out of her apartment in 2006 because Vaught kept telling her a home would be ready any day. She wound up living in a hotel room for months, with her furniture and belongings in a storage building. Myers said she has been hounded by debt collectors ever since, including one that filed a foreclosure lawsuit trying to take back a non-existent home.

  • The process has been repeated each time a new collection agency purchases the debt. When Myers convinced the most recent creditor that she was not liable for the loan, the collection efforts were dropped. She then received a Form-1099 from that creditor stating that she owes federal and state taxes on the “forgiven” loan. “It’s been a nightmare,” Myers said. “You think it’ll never end.”

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