An Upper Marlboro mortgage broker has admitted to inflating her clients’ incomes so that they would qualify for larger mortgage loans — a scheme that caused lenders to lose more than $1.3 million, officials said.
Licensed mortgage broker and the owner of the Newgate Mortgage company, Shola Risikat Balogun, pleaded guilty Wednesday in federal court to conspiracy to commit wire fraud in connection with a plot she led to make money off loan origination fees, commissions and other premiums, according to a statement from the U.S. Attorney’s Office for Maryland.
According to prosecutors, Balogun and others got in touch with low- and middle-income people interested in buying homes. The potential homebuyers provided Balogun, 46, and her associates with true information about their income and employment, the U.S. Attorney’s Office said.
But then the conspirators exaggerated the mortgage applicants’ income and “created bogus employment information in an effort to qualify these individuals for loans that they otherwise were unqualified to secure,” the government’s statement said. This happened at least 20 times.
Sometimes the homes purchased with the inappropriately large loans went directly into default. Other times, the buyers attempted to pay off the loans that they could not afford only to eventually fall behind, the statement said.
In addition to origination fees and commissions, Balogun made money on the scheme from “yield spread premiums and broker’s fees from each loan that closed,” prosecutors said.
Balogun, the leader of the scheme, could be sentenced for up to 20 years in prison. Her sentencing date has not yet been scheduled.
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