Loan files from a defunct Wichita, Kan.-based mortgage company turned up in a recent drug raid.
Information from the files, dating back to 2001 and 2002, had been used in conjunction with fraudulent activity and identity theft, Wichita Police Capt. Darnell Haynes told MortgageDaily.com.
Former customers of Mortgage Solutions, Inc. have been instructed to keep a watchful eye on their credit information for any suspicious activity.
"There have been few complaints (of identity theft)," Haynes said. "During the course of search warrants we started finding the files in the hands of bad guys," he said. "By and large we stumbled upon them."
According to documents from the Kansas State Bank Commissioner office, Mortgage Solutions was ordered to cease and desist its mortgage operations in February 2005 under the ownership of Steve Rapier.
The documents allege Rapier falsified documents and conducted mortgage business without being properly registered. As part of a settlement agreement, Rapier has been banned from mortgage loan origination in the state of Kansas, the documents said.
Haynes said officials are not sure how the files ended up in the possession of the thieves, and that Rapier had publicly stated he destroyed the files.
Just last Tuesday, Haynes said a Wichita resident received a call telling her to "look in her driveway," at which point she found about 300 more mortgage loan files. Haynes said the files are in manila folders and contain loan applications, tax returns and other financial data used in the loan process.
Using the personal data and a fake driver's license or other forged identification, the thieves apply for store credit, mail out for a credit card or use an in-store credit card center kiosk and have the card shipped to them, he said. They then allegedly sell the merchandise for drugs; officials estimate the amount to be in the tens of thousands of dollars.