Consumer Alert: Mortgage company forces victims into foreclosure - KTIV News 4 Sioux City IA: News, Weather and Sports

Consumer Alert: Mortgage company forces victims into foreclosure

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Jay Dunlap conned victims out of money and their homes. Jay Dunlap conned victims out of money and their homes.
ST. LOUIS, Mo. - One man used his mortgage company to help those with poor credit.  In reality, he ended up forcing them into foreclosure through a web of lies and deceit.

A rural home in St. Louis, Missouri is at the heart of a mortgage fraud scandal that left a family homeless and landed one man behind bars.
 
"Jay Dunlap ran a mortgage company that specialized in dealing with people that had poor credit," says Dan Taylor, a U.S. Postal Inspector.
 
In fact, many of his clients had been denied real estate loans in the past.  Postal inspectors say he used this to his advantage.
 
"He was generally contacting people that were desperate for whatever they could get to try and save their homes," says Taylor.
 
Dunlap would offer to buy his client's house from them for a year.  They would essentially pay him rent.
 
"After a year, they would be able to buy the house back and then have better credit and qualify for a regular loan," says Taylor.

Once Dunlap took possession of the house, he took out several equity loans.
 
"Dunlap took these loans against the property, in the belief that the victims would never come up with the cash, to try to repurchase the home," says Taylor.
 
In this case, victims tried to buy their homes back and quickly realized what Dunlap had done.
 
"He took their money, deposited it, spent it, but never actually transferred the title back to the victims," says Taylor.
 
Dunlap stopped paying on the equity loans and banks foreclosed on the property.
 
"Ultimately, the victims were foreclosed on and had to move out of the house," says Taylor.
 
Postal inspectors say it is possible more victims exist.  They also warn anyone looking for a mortgage to do their research carefully.
 
"Be very careful who you are dealing with," says Taylor.  "Check references, check licensing, and things along those lines."

Dunlap was sentenced to five years in prison on bank and wire fraud.  He was also ordered to pay nearly $350,000 in restitution.

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