Loan processor acquitted of mortgage fraud charge in federal trial

A recent federal trial in which a loan processor was accused of conspiring with several other parties to defraud a mortgage company ended abruptly when the judge dismissed all criminal charges against the defendant.

The woman’s attorney lauded the outcome, stating that his client was acting in good faith in her job and had no knowledge that mortgage fraud was being carried out by other parties associated with the matter.

“If you’re in a bed of crooks and thieves and you don’t know it, it doesn’t put you in their conspiracy,” he said following the dismissal.

The matter related to a loan for the purchase of property in Mobile, Alabama. It was ultimately revealed that the borrower was wholly unqualified to receive the loan, having neither money nor a job.

Notwithstanding those deficiencies, a lender approved the loan, relying on documentation supplied by the mortgage company where the woman was employed. A real estate agent helped the borrower open an account, putting $1,900 of his own money into the account. A loan officer subsequently created and submitted false W-2 forms, citing employment at a company in which the borrower had no actual involvement.

“Into this mess” came the defendant, stated her attorney. In her capacity as loan processor, she approved the borrower’s application. The borrower subsequently defaulted on the loan, with the lender selling the property at a loss.

The prosecution contended that the defendant’s verification was a fraudulent act, but the federal trial judge viewed otherwise, stating that insufficient evidence was offered to establish the woman’s guilt.

The court threw out the charges mid-trial, prior to the jury’s consideration of the case.

Source: AL.ocm, “Federal judge throws out mortgage fraud charges against Mobile loan processor,” Brendan Kirby, Oct. 2, 2013