A Florida man was recently sentenced to 26 years in prison for foreclosure and short sale fraud. John Lebron, 33, was convicted last week of setting up a complex scheme to buy and sell foreclosed houses, make money on each part of the deal, and default on the loans. He is hardly alone among foreclosure offenders.
Florida is known as the nation’s capital in foreclosure fraud. The state was among the hardest hit by the collapse of the housing bubble and subsequently has seen countless homeowners who can’t make their mortgage payments. In the first quarter of this year alone, one in every 104 houses in the state received a foreclosure notice for a total of 85,671, a rate three times the national average, according market research firm RealtyTrac.
Of the top ten metro areas in the country with the highest foreclosure rates, seven are in Florida, led by the Miami area at number one. The state projects that it will process over a million foreclosure cases in the next four years, according to the Palm Beach Press. And a lot of foreclosures means a lot of opportunities for scams.
Lebron’s scheme involved a complicated house-flopping maneuver using straw purchasers to rip off the banks. However, many of the foreclosure scams out there are aimed directly at distressed homeowners, attempts to wring out what little cash they can come up with or steal the houses outright.