Metropolitan Money Store Loan Processor Pleads Guilty in Mortgage Fraud Scheme
Under the Scheme Conspirators Took Title of Homes from Financially Distressed Homeowners and Secretly Used Home Equity for Personal Benefit
Greenbelt, Maryland - Katisha Fordham, age 35, of Washington, D.C., pleaded guilty today to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
“We are prosecuting mortgage fraud crimes thanks to the coordinated efforts of federal and state investigators,” said U.S. Attorney Rod J. Rosenstein.
According to her plea agreement, in December 2005, Katisha Fordham was hired to work as a loan processor at the Metropolitan Money Store, located in Lanham, Maryland, which offered foreclosure consultation and credit services to financially distressed homeowners. Fordham was paid $750 to $1,500 per processed loan and was responsible for working with loan officers, lenders, and closing attorneys in order to facilitate the closings of loans, including loan re-finances and mortgage reversal program loans. Prior to taking the position of loan processor, Katisha Fordham worked at a perfume and make-up company and had no background in the mortgage brokerage, credit repair or financial services industries.
Beginning in March 2006, Katisha Fordham conspired with others in a scheme to fraudulently promise to help homeowners, who had substantial equity in their homes but were facing foreclosure because of their inability to make monthly mortgage payments, avoid foreclosure and repair their damaged credit. The homeowners were directed to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a year, during which time Metropolitan Money Store promised to improve the homeowners’ credit ratings, help them obtain more favorable mortgages, and eventually return title to their homes to them. The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit. The straw buyers were paid $10,000 to participate in the scheme.
Using the homeowners’ properties, the conspirators applied for mortgages to extract the maximum available equity from the homes and prepared and submitted to mortgage lenders (“the lenders”) fraudulent loan applications to obtain fraudulently inflated loans on the target properties in the straw buyers’ names. At settlements, the conspirators imposed numerous fees and required “seller contributions” which were far in excess of industry standards; they imposed fees for services which were not performed, disclosed or explained to the homeowners; and they transferred the sale proceeds out of the escrow accounts into the conspirators’ business and personal bank accounts and converted a substantial portion of those funds to their personal use.
Specifically, Katisha Fordham agreed to serve as a straw buyer for five properties, and secure mortgage loans in her own name to do so, because she had a good credit history, and her co-conspirators paid her $10,000 for each property for which she served as a straw buyer. In purchasing the five properties Katisha Fordham made false statements as to personal and financial information on settlement documents.
From March 2006 through June 2006 Katisha Fordham received five $10,000 cashier’s checks, in return for serving as a straw buyer for the fraudulent real estate settlements of properties in Washington, D.C. and Bowie, Oxon Hill and two properties in Upper Marlboro, Maryland.
As a result of this scheme, the total loss attributable to Katisha Fordham, including the estimated losses to the mortgage lenders, is between $200,000 and $400,000.
Katisha Fordham faces a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy. U.S. District Judge Roger W. Titus scheduled sentencing for September 21, 2009.
Katisha Fordham is the fourth defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Richard Allison, age 37, of Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, age 47, of Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland and Carlisha Dixon, age 31, of Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; each pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison.
United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation, U.S. Secret Service, Internal Revenue Service - Criminal Investigation and the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation Investigative Unit for their investigative work. Mr. Rosenstein commended Assistant United States Attorney James A. Crowell IV, who is prosecuting the case.