A subprime wholesale lending account executive and her husband, who was a mortgage broker, have admitted to defrauding her now-defunct employer using fake income and employment documents.
New Century Financial Corp. was among the nation’s largest subprime mortgage lenders in the lead up to the housing crash.
In 2006, the Irvine, Calif.-based company originated $60 billion in subprime home loans, a little more than the $56 billion it closed in 2005.
But business came to a screeching halt in 2007 when the secondary market for nonprime mortgages seized up — forcing the company into bankruptcy.
In the two years leading up to New Century’s demise, Charmagne Elegado worked as a wholesale account executive for subsidiary New Century Mortgage.
Elegado solicited mortgage brokers in the San Diego area.
One of her clients was her husband, Eric Elegado, who was also a real estate broker.
According to the U.S. Attorney’s Office for the Southern District of California, Elegado aided her husband in closing loans using mortgage fraud — many that wound up at New Century.
The government claims that losses from the mortgage fraud scheme reached $17 million.
The pair, along with seven other defendants — Theodore Cohen, Minh Nguyen Age, Regidor Pacal, Alexander V. Garcia, Roman Macabulos, Ramin Lotfi and Roderick Huerto — were indicted in February 2012.
The co-defendants were allegedly paid $500 in cash or by check to use their companies to falsely verify employment and income for unqualified borrowers.
On Friday, both Elegados pled guilty to conspiracy to commit a massive mortgage fraud. They are scheduled for sentencing on Feb. 28, 2014.
All of the other co-defendants have previously pled guilty.