Ex-loan officer gets federal prison sentence in mortgage scam

[depakid]

Source: The Oregonian

Admitted mortgage fraudster Marty Folwick was sentenced to 63 months in federal prison Monday for engineering a number of bogus mortgage loans during the real estate boom. Folwick, 50, of Southeast Portland allegedly put together as many as 70 fraudulent loans from more than 30 financial institutions.

He took an estimated $880,000 in kickbacks from deals inked from 2005 to 2007, according to court documents.

Folwick is the first of three local mortgage brokers indicted earlier this year to be sentenced for activities during the boom. In two other mortgage fraud cases, federal prosecutors charged Jeremy Richardson in May with one count of wire fraud and in June charged Lee Howlett with one count of conspiracy.

Lying on a mortgage application to get a loan approved seemed a victimless crime as long as home values continued to appreciate. Homeowners in a mortgage they couldn't afford often could refinance their way into a more favorable loan as long as their homes increased quickly in value. But the real estate bust changed all that as values plummeted. The U.S. economy has since been dragged down by a tidal wave of mortgage defaults across the country.

Read more: http://www.oregonlive.com/news/index.ssf/2008/12/exloan_officer_gets_federal_pr.html

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Hopefully, this is the first of many such prosecutions.

[PADemD]

1. Less than one month per fraudulent loan. Wonderful!

[Puppyjive]

2. Watch out for mortgage crooks

I think these are the guys who ripped off my friend's son and his wife. They thought they were buying a house and put up a large down payment. They lived in the house for about a year, making payments, and then all of the sudden they got an eviction notice.

[BrklynLiberal]

3. The ones who made millions off this scam will never even see the inside of a courtroom.

[KakistocracyHater]

4. the 30s Banksters DID

They BETTER, or we as a nation-America-are ruined. It's the law.

[sarcasmo]

5. Marty needs to be the first on many.

[flamin lib]

6. My last year in Real Estate sales almost all of my manditory

continuing education was about loan and mortgage fraud. It was rampant at all levels from $50k condos to multi $mil commercial deals.

From my minimal experience:
Signing a non-existent lease to a fictitious tenant to cover the mortgage on the first house while buying a second.

Appraising a "fixer upper" for enough to cover the repairs and a sizable kickback to the appraiser, the seller and the loan officer.

Filling in loan documents with fraudulent information about income and bank balances.

Some of these were done by a single individual and some were a conspiracy of agents, loan brokers, appraisers and sellers. It was so easy toward the end because lenders stopped having property appraised and were offering "no-doc" and "stated income" loans. You could literally make up stuff and nobody would ask for documentation to back it up.

I was told that there were so many investigations that the FBI and Treasury were only prosecuting those with multi-million $ scams. If you kept your income to under a $mil you were "safe". Looks like the ceiling is getting a little lower . . .