Kathy Moore’s loan application sailed through the mortgage desk at Lehman Bros. Bank, and little wonder. With sterling credit, deep pockets and two appraisals pegging the value of the Benedict Canyon house she wanted to buy at $2.5 million, she seemed a perfect fit for a $1.47-million loan.

Had the bankers taken a closer look, they might have discovered that the home was worth just $775,000 and that Moore’s borrowing power existed only on paper.

They also might have derailed a burgeoning real estate fraud that authorities say grew into one of the biggest and boldest in California history, and one that sheds light on the wave of foreclosures now sweeping the country.

& #8226;


Read the full Los Angeles Times story

.