Stevie L. Johnson, one-time licensed escrow officer, has been sentenced for his fraudulent mortgage schemes, reports the Houston Chronicle. After making nearly $40 million off of hundreds of illegal home sales, Johnson faces 40 years behind bars.
While some forms of mortgage fraud became common during the housing boom, all are illegal. And no two frauds are alike: some involve falsely inflating a borrower's income on application forms, some involve appraisers, some real estate agents.
While the market was booming, the deceptive claims went unnoticed, but now that the market has cooled, many fraudulent claims are coming to light.
Before Johnson received his sentence, two other mortgage fraudsters got 25-year sentences for their mortgage scams. Defense attorneys claim the sentences are over-the-top, but perhaps that's what it takes to discourage such fraudulent practices.
Learn how bankruptcy can stop mortgage foreclosure.
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