Minnesota Department of Commerce Fines Couple $100,000 in Mortgage Fraud Scheme
The Minnesota Department of Commerce (DOC) has fined a Twin Cities couple $100,000 for their part in an alleged mortgage fraud scheme dating back to 2005. According to the DOC, Kristina Marie Birt of Hastings, Minn. bought eight homes between 2005 and 2006. The homes were allegedly purchased as investment properties with the intent of flipping them for a profit. Birt bought the homes, which were routinely for-sale-by-owner or private sales, at substantially higher amounts than the listing price to allow for cash back at or after the closing, according to the DOC. In some instances, Birt allegedly received cash back from the seller. Birt admitted that she allowed her husband, Matthew Birt, to complete the transactions and sign her name to the loan applications and closing documents. During the closings, the Birts, the sellers, the closer and their loan officer, Derrick Lance, were all allegedly aware of the fraud in the transactions and they openly discussed cash-back instructions. Ultimately, all eight properties fell into foreclosure, resulting in significant losses to the lenders. To settle the matter, the DOC, which regulates the real estate and mortgage industries, entered into two separate consent orders with the Birts. Matthew Birt was ordered to pay a penalty of $75,000, had his real estate sales licensed revoked, and has been permanently barred from engaging in mortgage originating or servicing activities in Minnesota. The DOC also revoked Kristina Birt's real estate salesperson license, permanently barred her from engaging in mortgage originating or servicing activities in Minnesota, and ordered her to pay a penalty of $25,000. For more information, visit www.state.mn.us/portal/mn/jsp/home.do?agency=Commerce.