WFAA-TV

Misfortune is not the only reason 3500 homes are posted for foreclosure next month in North Texas. The FBI says mortgage fraud has reached epidemic proportions.

One couple, who found they were major property owners in North Texas without ever signing any papers, has felt the epidemic first-hand.

Paul Dyl and his wife Jackie live in a mobile home in Cheyenne, Wyoming. Mr. Dyl drives a well used pickup truck and their annual income is less than $30,000 a year.

While Mr. Dyl has never been to Texas and Mrs. Dyl has only been in the state once, beginning in 2004, six North Texas properties ended up in their name.

They said they knew nothing about it until they began receiving phone calls from bill collectors all over the country claiming they owed more than $2 million dollars.

"And now I'm 57 years old and I'm never going to recover," Mr. Dyl said. "It just turned everything upside down."

The first bank to call was what is now Fidelity Bank in Plano. The Dyls said bank president Tom Freas was among the nastiest of the callers.

"He just screamed at me one day," Mr. Dyl said. "He said, 'You signed these documents saying you were going to live in Texas."

Mr. Dyl said Freas said he had actually met up with him face to face.

"And I said, 'No, I've never seen you face to face,'" he said.

Anybody who has ever really met Mr. Dyl would most likely remember him since he has no right hand after losing it in an accident years ago.

"You can't miss a hook," he said.

The Dyls, it turns out, were victims of identity theft and mortgage fraud to the tune of more than $2 million. The checks and balances that might be expected to be in place when getting a mortgage failed, six times.

Despite the anguish the Dyls have been through, virtually everybody News 8 could find in the case claimed it was a private matter and somebody else's fault.

Freas wouldn't talk about the case saying, "It's covered under the privacy act....the issue is resolved between me and my customers."

The problem is the Dyls never were his customers.

"He got real nasty about it," Mr. Dyl said. "And he said, 'We give you a loan and then you can't make the payments. What's the deal? And I said, 'I don't know you people.'"

The Fidelity loan only accounts for one vacant lot in Flower Mound that had been bought in the Dyls' name for more than $294,000. Nearly every day over the past year, they said they have discovered more as debt collectors continued to call.

A meager paper trail on a Plano house, which was bought in their name for $360,000, led partly to Benchmark Mortgage.

On its website, Benchmark touts how much money brokers can earn making loans through them. Benchmark Chief Operating Officer Stewart Hunter wouldn't talk about the case either. However, he said the Dyls were his customer and cited the Privacy Act.

A loan application for the property bears the address of a Benchmark Mortgage "office," which turned out to be an apartment house in Irving.

Experts say an apartment can be a mortgage office and be part of a drive to make buying a home easier to make money.

"There are people who will do deals over the phone from Florida or California having never visited the property and having never physically met the loan officer or the realtor or whatever," said David Hamilton, a mortgage lender.

Experts say the way to prevent fraud by the various entities handling the process is by requiring the people to come in person.

The Dyls said they always sign their names using their middle initial, which was one of the indicators that their signatures were forged. One forgery apparently led to another.

David Fair, CEO of one of Dallas' leading title companies, said mortgage fraud can snowball.

There have been so many fraudulent mortgage fraud transactions in the last two years that now someone who is a perpetrator is able to go get a previous mortgage fraud to use it to support the current mortgage fraud," he said.

Washington Mutual, one of the nation's largest home lenders, made four loans to someone purporting to be the Dyls for more than $800,000.

The Dyls said they receive dozens of threatening letters and even more calls.

"They were so threatening sometimes it was just fearful," said Mrs. Dyl.

They filed a complaint to Washington Mutual, known as WaMu, in the fall of 2005. However, nothing happened until News 8 contacted the company. WaMu declined an on camera interview.

But in a statement, Brad Russell said, "It is the [mortgage] broker's responsibility to verify the identity of the borrower" and; "WaMu is committed to working with the credit agencies, proper authorities and victims to minimize any future impact this may have on the Dyl family."

"You guys screwed up our credit," Dyl said. "We can't go out and buy a car. We can't buy nothing without all this stuff going on."

Fair said the growth of mortgage fraud is disastrous to the real estate economy and sees one solution.

"We need to have more enforcement," he said. "We don't seem to have enough enforcement."

The Dyls contacted the FBI but nothing has happened. They ultimately took their case to the Cheyenne Wyoming Police Department, which took their complaint.

They tried to hire a lawyer but most wanted $5,000 to even start a case. Now, Mike Haines of Dallas is representing them.

E-mail bharris@wfaa.com