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Twin Cities couple fined $100,000 for alleged mortgage fraud scheme

December 06, 2010

Twin Cities couple fined $100,000 for alleged mortgage fraud scheme

For Immediate Release:  Monday, December 6, 2010

Twin Cities Husband, Wife Fined $100,000 for Alleged Mortgage Fraud Scheme

(ST. PAUL, MN)  The Minnesota Department of Commerce has fined a Twin Cities couple $100,000 for their part in an alleged mortgage fraud scheme dating back to 2005.

According to the department, Kristina Marie Birt of Hastings 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 department.  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 department, 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 salesperson licensed revoked, and has been permanently barred from engaging in mortgage originating or servicing activities in Minnesota.  The department 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.

About the Minnesota Department of Commerce
The Minnesota Department of Commerce licenses and regulates mortgage originators, brokers, servicers and multiple other individuals and companies in the real estate industry.

In 2009, the department took action against 71 individuals and companies in the mortgage industry and 45 actions against individuals and companies in the real estate sector.  As of the end of November, the department had taken 69 mortgage-related actions and 51 actions in the real estate sector.  The department is increasingly referring its cases to criminal authorities for prosecution.

Consumers with complaints or questions may call the Minnesota Department of Commerce at (651) 296-2488 or toll free, 800-657-3602.