A former mortgage broker in Pennsylvania has been sentenced to more than three years in prison for duping wholesale lenders.
In addition to the mortgage broker, the mortgage fraud case involves a loan originator who was employed by the broker.
The pair allegedly contacted prospective home buyers who typically had moderate to low incomes and actually provided accurate income and employment information.
But since the clients didn’t qualify for the loans, their income was inflated and fraudulent employment information was created.
The loans were run though Newgate Mortgage in Maryland, which was owned by Shola Risikat Balogun.
After the loans closed, some borrowers attempted to make payments for a period of time but ultimately defaulted. Others made no payments at all.
“Balogun and others profited from these fraudulent transactions by collecting origination fees, commissions, yield spread premiums and broker’s fees from each loan that closed,” an announcement Wednesday from the U.S. Attorney’s Office for the District of Maryland said. “Balogun was a leader of the scheme.”
Wholesalers on 20 fraudulent mortgages suffered losses of $1,352,378.
Federally insured banks and the Federal Housing Administration were apparently among the victims based on the involvement of the Federal Deposit Insurance Corp. Office of Inspector General and the Housing and Urban Development Office of Inspector General – Office of Investigations.
Balogun, who previously pled guilty, was sentenced Wednesday to 37 months in prison. She was also ordered to pay restitution and forfeit $1,352,378.
Former Newgate originator Emeka Udeze previously pled guilty and has yet to be sentenced. He additionally pled guilty to mortgage fraud in a separate conspiracy.