A Georgia woman pleaded guilty pleaded for her role in a three-year scheme resulting in the approval of approximately 450 mortgages based on fabricated documents and false information.
According to the charges and other information presented in court, Kimberly Johnson participated in a conspiracy in which homebuyers and mortgage brokers submitted fraudulent loan applications to induce mortgage lenders to fund mortgages. Johnson’s role was to alter or fabricate the supporting documents for the loans, including bank statements, pay stubs and Forms W-2.
Johnson helped approximately 450 homebuyers to commit mortgage fraud by obtaining loans for which they were unqualified. The fraudulent loan applications were submitted to numerous mortgage lenders, and some of the mortgage brokers who worked on obtaining the loans were part of the conspiracy. These fraudulent loans totaled approximately $161 million, and many of those loans defaulted.
Johnson, of Hampton, Georgia, pleaded guilty to one count of conspiracy to defraud the US in a mortgage fraud scheme. A part of her plea, she has agreed to pay restitution to the victims of the conspiracy, including the US Department of Housing and Urban Development. She is scheduled to be sentenced on April 11.
“The defendant and her co-conspirators brazenly manipulated the real estate lending process out of sheer greed,” said Ryan Buchanan, US Attorney for the Northern District of Georgia. “Criminals like Johnson, who engage in mortgage fraud, threaten the soundness of the real estate market in our communities. Our office is committed to prosecuting these bad actors who abuse the system for their personal gain and to safeguard the mortgage lending system for those who rely on this financial support.”
I still wonder how no realtors or mortgage brokers went to jail for the fraud they committed prior to 2008. When the foreclosures started rolling in there were obvious problems. Letting realtors act as mortgage brokers just allows for more fraud. The temptation of easy money is too great for some salesmen.
If you think there was widespread fraud by realtors and mortgage brokers, then you are indeed clueless on what led to the mortgage meltdown. The criteria to obtain a loan were so loose that almost anyone could get a loan without needing a realtor or mortgage broker to commit fraud so the borrower could get approval.
125% Loans and bad actors in sales, mortgaging and appraising helped bring the meltdown in conjunction with the roaring price increases. People thought values could only go UP and were counting on it happening very quickly. But it turned out the prices can also go down and just as quickly. Appraisers learn early to be very diligent about appreciating or depreciating markets. Since no single appraisal fee is worth going to jail for or losing a license, appraisers have no legal incentive to inflate values.