A former Perry Hall mortgage loan officer pleaded guilty yesterday in federal court to his role in a widespread property flipping scheme, admitting that he falsified information on applications for government-backed home loans.
Donald F. Hanson Jr. pleaded guilty in U.S. District Court in Baltimore to a single count of fraud. According to court records, Hanson falsely stated on loan applications that he had met with potential homebuyers in person, as required by the U.S. Department of Housing and Urban Development.
The loans financed house sales by William Otto Schmidbauer, a former Perry Hall real estate agent accused of being the mastermind in a property flipping scheme that prosecutors say brought him gross profits of $1.4 million.
Schmidbauer and 16 co-defendants, including Hanson, were charged in spring 2001.
Court records show that Hanson worked as a loan officer for KMC Mortgage Co. and Baltimore American Savings Bank. He later operated a company called American Residential Realty, which was closely linked to Schmidbauer's former real estate business.
The federal case focuses on 58 transactions involving loans of more than $4.4 million.
At the time Schmidbauer was charged, prosecutors said HUD had paid more than $3.9 million to reimburse lenders for losses on 48 of those loans that had been insured by the Federal Housing Administration, a HUD agency.
Prosecutors allege that Schmidbauer, who has agreed to plead guilty, purchased low-cost houses and quickly sold them at much higher prices, using fraudulent information to obtain mortgages for the buyers.
In a related case, former Jarrettsville real estate appraiser Dale Schulz was charged this week with making false statements on property appraisal forms to support government-backed loan applications.
According to charging papers, Schulz on numerous occasions claimed that he had personally conducted the inspections for the appraisals when he had not.
Schulz was one of a half-dozen Maryland real estate appraisers who were barred in 2001 from the FHA program because of questions about inaccurate appraisals.