Mortgage Daily Logo

Secondary Marketing Legal Insider

Mortgage News

One criminal defendant in a huge secondary marketing case pleaded guilty while another chose to face a jury. A Texas loan correspondent had no luck convincing an appeals court to reverse a judgment enforcing a repurchase demand.

The former servicing manager of U.S. Mortgage, Leroy Hayden, pleaded guilty to one count of wire fraud, the U.S. Department of Justice reported. The plea was tied to a $136 million secondary marketing fraud scheme. He faces sentencing on Sept. 27.

Hayden worked at the company from 2004 until January 2009. He allegedly conspired with U.S. Mortgage president Michael J. McGrath Jr. and several other people to fraudulently sell mortgages to Fannie Mae that belonged to other credit unions. McGrath, who was scheduled for sentencing this month, pleaded guilty in June 2009 and admitted to the fraudulent sale of hundreds of loans in order to prop up his own company and make investments.

Fake reports were provided to credit unions indicating that they still owned the loans, the news release said. Hayden changed data in the company’s servicing system to hide the fraud.

Just weeks after a Jan. 27, 2009, raid by dozens of law enforcement agents, Pine Brook, N.J.-based U.S. Mortgage and subsidiary CU National Mortgage LLC were forced into bankruptcy.

Lee Bentley Farkas, former chairman of failed Taylor, Bean and Whitaker Mortgage Corp., pled not guilty on July 2 in U.S. District Court for the Eastern District of Virginia. Farkas is accused of conspired to misappropriate more than $0.4 billion from Colonial Bank’s warehouse lending division.

Farkas, who was arrested last month, requested a jury trial. The case has been continued to Nov. 1.

Freddie Mac filed opposition to a Motion for an Order Authorizing and Directing Examination that was filed by Bank of America in the U.S. Bankruptcy Court for the Middle District of Florida Jacksonville Division. The filing was made in the Taylor Bean bankruptcy case.

Freddie claims it would cost at least $10 million to provide the discovery data requested by BofA. The requests reportedly equate to 1 billion pages of documents and 32 terabytes of data.

“Indeed, the information requested by BoA includes at least 12 witnesses associated with Freddie Mac, as well as eight years’ worth of documents relating (according to the debtor) to over 295,000 mortgages,” Freddie said.

The Court of Appeals of Texas, Fourteenth District, Houston, denied an appeal by Home Loan Corp., which does business as Expanded Mortgage Credit, according to the opinion posted at Leagle.com. The appeal sought to overturn a lower court’s summary judgment in favor of JPMorgan Chase Bank, N.A.

After three loans defaulted on April 1, 2007, Houston-based Home Loan refused to repurchase the loans as demanded by Chase because the loans hadn’t become 30 days past due. Chase filed a breach-of-contract claim alleging Home Loan violated representation, warranty and covenant provisions in the Mortgage Loan Purchase, Sale and Interim Services Agreement. Chase claims that Home Loan knew the mortgagors for two of the loans had not made on-time payments during either January or February 2007.

Chase’s move for a summary judgment was granted, and Chase was awarded damages of $953,358 and attorney’s fees of $44,000.

“We affirm the trial court’s judgment,” the appeals court opinion said.

United States of America v. Lee Bentley Farkas, Defendant.

Criminal No. 1:10cr 200 (U.S. District Court for the Eastern District of Virginia).

HOME LOAN CORPORATION D/B/A EXPANDED MORTGAGE CREDIT, Appellant v. JPMORGAN CHASE BANK, N.A., Appellee.
Case No. 14-09-00119-CV, Opinion filed April 29, 2010 (Court of Appeals of Texas, Fourteenth District, Houston).

In re. Taylor, Bean & Whitaker Mortgage Corp., Debtor.
Case No. 3:09-bk-07047-JAF (U.S. Bankruptcy Court for the Middle District of Florida Jacksonville Division).

Related Posts

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

There is No Such Thing as a Free House …

Over the past several years, those who service loans in the State of Washington(1) have seen a dramatic rise in the number of lawsuits in which delinquent borrowers seek to quiet title to their homes on the grounds that lenders are barred from foreclosing based on...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Mortgage Servicer Portfolios

servicing news | mortgages outstanding statistics | foreclosure news   Servicing Portfolios as of 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 Residential Servicing Portfolios by Servicer Last Updated December 14, 2018...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Fannie Mae Profile

Last Updated December 27, 2018 7:38 PM Central   full list | other directories | bank search | SEC filings | execs | m&a | production   Government Takes Over Fannie, Freddie Sept. 8, 2008 The government has seized control of Fannie Mae and Freddie Mac. The move --...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Freddie Mac Profile

Government Takes Over Fannie, Freddie Sept. 8, 2008 The government has seized control of Fannie Mae and Freddie Mac. The move -- which is likely to push mortgage rates lower and provide a sense of stability for the more than 10,000 employees at both companies -- is a...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam