ST. LOUIS, Mo. – It is a costly lesson to learn. When choosing a mortgage company, be careful which one your choose. In one case, an unscrupulous company and its owner scammed victims out of their home and into foreclosure.
"Jay Dunlap ran a mortgage company that specialized in dealing with people that had poor credit," explained U.S. Postal Inspector Dan Taylor.
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In fact, many of Dunlap's clients had been denied real estate loans in the past. Inspectors say Dunlap used this to his advantage.
"He was generally contacting people that were desperate for whatever they could get to try and save their homes," said Taylor.
Authorities say Dunlap would offer to buy his clients' houses from them for a year and 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," Taylor explained.
But 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," Taylor said.
But in this case, victims tried to buy their homes back.
"He took their money, deposited it, spent it, but never actually transferred the title back to the victims," said 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," Taylor explained.
Postal inspectors say it is possible more victims exist. They also warn anyone seeking a mortgage to do your research.
"Be very careful who you are dealing with; check references, check licensing, things along those lines," added Taylor.
Meantime, Dunlap was sentenced to 5 years in prison on bank and wire fraud. He was also ordered to pay almost $350,000 in restitution.