Former MBA president pleads guilty to bank fraud and money laundering

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

Ronald McCord, founder of the Oklahoma City-based First Mortgage Company (FMC) and sole annual president of the Mortgage Bankers Association, faces up to 40 years in federal prison and a fine of up to $ 1.25 million. McCord pleaded guilty to five counts, including bank fraud, money laundering and misrepresenting to a financial institution. A state grand jury entered an indictment of 24 counts against McCord last June based on an investigation by the Inspector General of the Federal Housing Finance Agency.

According to last week’s plea hearing, McCord admitted defrauding 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 in loans from mortgage lenders, but failed to repay them when those loans were refinanced or paid off.

By the time the banks learned of McCord’s actions, First Mortgage Company had outstanding balances of around $ 200 million and $ 140 million on Spirt / Mortgage Corp. lines of credit. and Citizens / Funding Corp., respectively. The companies then terminated future warehouse loans to FMC and demanded that McCord assign those mortgages to them to ensure that the title companies handling those mortgages send the payments directly to the banks.

However, after Spirt / Mortgage Corp. and Citizens / Funding Corp. refused to fund new FCM mortgages, McCord turned to North Carolina-based mortgage lender CapLOC. He offered to sell FMC’s mortgage business in exchange for quick funding from CapLOC. At the plea hearing, McCord admitted that he made a materially false statement and representation to CapLOC in order to influence his actions during their negotiations.

In addition, McCord’s company has made approximately 12,000 loans worth approximately $ 1.8 billion to Fannie Mae. He pleaded guilty to defrauding Fannie Mae by embezzling escrow funds meant to pay homeowners’ taxes and insurance premiums to cover FMC’s operating expenses.

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

About Ernest Decker

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