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Two Sentenced in NC Mortgage Fraud Scheme

Mortgage News > Two Sentenced in NC Mortgage Fraud Scheme
Date: 02/19/2007    Two Sentenced in NC Mortgage Fraud Scheme

Two Raleigh men were sentenced to prison time Wednesday in a U.S. District Court for their role in a Wake County, North Carolina mortgage fraud plot.

James Thomas Davis, 56, was sentenced to 16 years and 8 months in prison and David Layton, 55, to four months of prison time.

According to Federal prosecutors, Davis, the owner of Easy Financial Services and Eagle Investments Club, was the mastermind of plan that involved buying homes from builders at an inflated price. He would then find investors to buy the homes and rent them out for profit, although the filed mortgage paperwork said that the investors themselves would be occupying the homes.

Davis then found renters with poor credit to rent out the homes on a "rent-to-own basis."  The renters paid Davis hefty down payment and cheap monthly rent. He pocketed the money and the homes eventually went into foreclosure for lack of payment. The investors found themselves with severely damaged credit while the renters had lost their down payments.

Layton's role in the scheme was apparently as Davis' accomplice in preparing the false mortgage applications for the home purchases.