July 30, 2021

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Mortgage News

Former MBA chairman pleads guilty to bank fraud and money laundering

After months of protesting his innocence, a former Mortgage Bankers Association chairman is jailed for defrauding two warehouse lenders by selling more than $ 14 million of their loans “out of trust”.

Ronald McCord, Founder of Oklahoma City First mortgage lender (FMC) and one-time annual chairman of the Mortgage Bankers Association face up to 40 years in prison and a fine of up to $ 1.25 million. McCord pleaded guilty to five counts, including bank fraud, money laundering and making a false declaration to a financial institution. A state grand jury filed a 24-point indictment against McCord last June based on an investigation by the Inspector General of the Federal Housing Finance Agency.

According to last week’s hearing, McCord admitted cheating on Spirit Bank and Citizens State Bank and their residential mortgage subsidiaries American Southwest Mortgage and American Southwest Mortgage Funding. The investigation found that McCord had sold more than $ 14.1 million of the mortgage lenders’ loans but did not repay them when those loans were refinanced or repaid.

When the banks learned of McCord’s action, First Mortgage Company had approximately $ 200 million and $ 140 million, respectively, on the Spirt / Mortgage Corp credit lines. and Citizens / Funding Corp. The companies then ended future storage lending to FMC and asked McCord to assign those mortgages to them to ensure that the title companies processing those mortgages sent the disbursements directly to the banks.

After Spirt / Mortgage Corp. and Citizens / Funding Corp. Refused to fund new FCM mortgages, McCord went to North Carolina-based lender CapLOC. He offered to sell FMC’s mortgage lending business for quick funding from CapLOC. At the hearing, McCord admitted that he had made a materially misrepresentation and statement to CapLOC in order to influence CapLOC’s actions during the negotiations.

In addition, McCord’s company serviced approximately 12,000 loans worth approximately $ 1.8 billion for Fannie Mae. He pleaded guilty to defrauding Fannie Mae by diverting trust funds to pay homeowners’ taxes and insurance premiums to cover FMC’s operating expenses.

“McCord also admitted that he then laundered the proceeds by arranging a transfer from the FMC operations account to a home builder in payment for the construction of McCord’s Colorado home,” said the Oklahoma attorney.