Real Estate

Former Fannie Mae employee accused of taking bribes, selling foreclosures below market value

Shirene Hernandez allegedly made $1 million in the scheme

A former Fannie Mae employee allegedly made more than $1 million by accepting bribes and approving the sales of foreclosed properties at below market value to herself and to brokers in exchange for kickbacks.

According to the U.S. Attorney’s Office for the Central District of California, Shirene Hernandez formerly worked at Fannie Mae in Irvine. At Fannie Mae, Hernandez worked as a REO foreclosure specialist and was tasked with the disposition of properties foreclosed on by Fannie Mae.

Court documents show that Hernandez’s duties at Fannie Mae included assigning Fannie-Mae owned properties to listing brokers and approving sales of those properties based on offers submitted by those brokers.

But, between April 2011 and at least July 2016, Hernandez allegedly accepted bribes for steering foreclosures to certain brokers and even allegedly bought foreclosures herself.

According to the U.S. Attorney’s Office, Hernandez allegedly approved sales of Fannie Mae-owned properties at discounted prices to herself, as well as brokers who paid her cash kickbacks.

Hernandez also allegedly received bribes, in the form of cash payments, gifts, and other things of value, from brokers in exchange for listing opportunities and the resulting commissions that brokers earned on sales.

Court documents show that one of the Fannie-Mae owned properties that Hernandez allegedly purchased was bought through “intermediaries and alter egos,” who then rented out the property and provided Hernandez with the rent proceeds.

The indictment alleges that Hernandez’s profits from the scheme were more than $1 million.

Hernandez was arraigned late last week on two counts of wire fraud and entered a plea of not guilty. Hernandez was then released on a $65,000 bond, and ordered to stand trial on March 20, 2018.

If convicted of the two charges in the indictment, Hernandez would face a statutory maximum sentence of 20 years in federal prison on each count.

When contacted by HousingWire, Fannie Mae said that it would not be commenting on the issue and referred all questions to the Federal Housing Finance Agency Office of Inspector General. The FHFA-OIG said that it will not be commenting on the issue as well.

[Update: This article is updated with a response from the FHFA-OIG.]

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