Lunch & Learn: The State of Housing

As housing supply dwindles, affordability concerns grow while competition heats up the market. This Lunch & Learn will examine the current state of housing, featuring experts who have an eye on the market.

HousingWire Annual Virtual Summit

Join us on October 25 for a chance to see a handpicked selection of sessions from HousingWire Annual along with technology demos from the most innovative tech companies! Register now for FREE to experience HW Annual just like you were there.

How credit scores impact lenders’ pipelines in a purchase market

When a lender works with a borrower to improve their credit score, they are able to offer the most competitive rate and terms. Learn more here!

Volly’s Grant Moon on challenges facing veterans

In this episode of HousingNews, we are joined by Grant Moon who discusses the difficulties veterans face during the home-buying process and misconceptions about VA loans.

Mortgage

Florida mortgage company owner gets 11 years in prison for leading massive fraud scheme

Defrauded HUD of $64 million, led to convictions of 24 individuals

The owner and operator of a Miami-area mortgage company will serve the next 11 years in prison after being convicted for his part in a massive fraud scheme that defrauded the Department of Housing and Urban Development and the Federal Housing Administration of more than $64 million.

Hector Hernandez, of Miami, Florida, the owner and operator of Great Country Mortgage Bankers, a mortgage lender in Miami, was sentenced for conspiracy to commit wire fraud affecting a financial institution.

Earlier this month, Hernandez pleaded guilty to the charges, and was he also ordered to pay $64,508,141 in restitution and to forfeit $8,000,000 in illicit profits.

According to the Department of Justice, Hernandez, 57, was the owner and operator of Great Country from at least 2006 and continuing through at least September 2008.

Great Country specialized in approving Federal Housing Administration loans.

The loans issued by Great Country were primarily for buyers of condominiums at complexes where Hernandez was a part owner, but many of the buyers were unqualified borrowers, due to insufficient income, high levels of debts, and outstanding collections. 

Hernandez admitted to authorities that his company employed loan officers, loan processors and underwriters, whom he knew approved and submitted false and fraudulent FHA mortgage loan applications and accompanying documents to HUD on behalf of the unqualified borrowers.

These documents included false pay stubs, false verification of employment forms, and fictitious letters from the borrowers.

According to the DOJ, closing costs were paid on behalf of the unqualified borrowers through an interstate wire transfer of funds.

The borrowers were also paid to purchase the condominium units as an unreported inducement to purchase, the DOJ said.

After the loans closed, the loans were sold to financial institutions. When the unqualified borrowers were unable to pay their mortgages, they defaulted on the loans, which caused losses both to the financial institutions and to HUD.

Hernandez admitted that the loss from the fraudulent conduct was at least $64 million.

All in all, 24 individuals were charged and convicted for their role in the massive scheme, including loan officers, loan processors and underwriters.

In the same case, a real estate developer for Great Country, Aleida Fontao, 62, of Miami, was sentenced today to serve 41 months in prison, and ordered to pay $7,131,952 in restitution and $400,000 in forfeiture.

An underwriter for Great Country, Olga Hernandez, 59, of Lake Mary, Florida, was sentenced earlier this week to serve 51 months in prison and ordered to pay $24,512,755 in restitution.

Hector and Olga Hernandez both pleaded guilty on July 13, 2015, while Fontao pleaded guilty on July 7, 2015.

Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo Ferrer of the Southern District of Florida and Special Agent in Charge Nadine Gurley of the U.S. Department of Housing and Urban Development Office of Inspector General Atlanta Region announced the sentencing.

Most Popular Articles

Goldman Sachs: Home prices will rise another 16% in ’22

Home prices may not have reached their peak yet. Not even close. Goldman Sachs economists predict that they’ll rise another 16% by the end of 2022.

Oct 13, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please