Wednesday, October 1, 2003

Agents raid mortgage firm

The Cincinnati Enquirer

Federal agents Monday raided a Springdale mortgage company that has been accused of civil fraud in real estate transactions.

Agents for the IRS and FBI entered Airline Union's Mortgage Co. on East Kemper Road in Springdale. The agents, however, wouldn't say what they were looking for, or whether anything was removed from the office.

"We can confirm that we were at that location and we were there on official business," Ross Brown, special agent and public information officer for IRS criminal investigations, said Tuesday.

At least two dozen real estate investors, mortgage brokers, appraisers and title agents are suspected in hundreds of dubious home-buying schemes, an Enquirer investigation revealed this summer.

Federal investigators describe widespread "flipping" over the past four years: Unscrupulous investors buy houses. An appraiser certifies that a home is worth more than it is. An unwary buyer is steered to a mortgage broker who helps get a loan for the house. A friendly title company processes the paperwork with no outside oversight.

Trester and the firm that was raided Monday night were accused in a lawsuit in June 2000 of falsifying mortgage information. Desiree Watts Edwards of Cincinnati alleged in her Hamilton County Common Pleas lawsuit that Trester falsified her loan application to make it appear she could afford the house.

Edwards received the loan, but found herself unable to make payments. She sued when she faced foreclosure. Under a court-approved settlement, Trester bought back the house in May 2001.

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