The vice president of a Florida mortgage firm has admitted that he withheld millions of dollars in proceeds from Fannie Mae and Freddie Mac on loans that had been paid off.
Coastal States Mortgage Corp. originated and serviced residential loans for both Fannie and Freddie from April 2007 through November 2008, according to a joint announcement from the U.S. Department of Justice, the Federal Housing Finance Agency’s Office of Inspector General and the Florida Office of Financial Regulation.
But the company allegedly failed to pass on the proceeds from home loans that had been paid in full.
The payoffs were concealed from the two government-controlled enterprises by providing fraudulent financial reports through an Internet portal. In addition, payments were made to Fannie and Freddie on the paid loans — giving the impression that the loans were still active and performing.
After all was said and done, the secondary lenders suffered losses of $18,735,904.
On Tuesday, Coastal States Mortgage Vice President Patrick J. Mansell pled guilty to operating the scheme, according to the news release.
Mansell was charged in an information filed last month in U.S. District Court for the Southern District of Florida.
He faces a maximum of five years in prison.