St. Louis bank fraud conviction comes as lending rules tighten

On Behalf of | Jan 10, 2013 | White Collar Crimes |

The real estate market has been in a confusing state of transition for nearly five years. Before the housing bubble burst a few years ago, few people could have predicted that financing rules and requirements would change so markedly.

But those rules continue to change. In fact, today the new Consumer Financial Protection Bureau is announcing more of them. One of the key goals is to strengthen underwriting standards and protect consumers by making sure that banks and other lenders take proper steps to verify that borrowers can pay.

Even as new rules go into place, however, there are still many past cases to be resolved involving allegations of mortgage fraud. In one recent St. Louis case, a real estate broker pleaded guilty yesterday to bank fraud and making false statements.

Federal prosecutors charged the broker with involvement in a scheme to mislead lenders by supplying them with false information on applications for real estate loans. Authorities alleged that many of the loans made as part of the scheme became delinquent. As a result of numerous defaults, the losses incurred by financial institutions and the federal government were in excess of $1 million, prosecutors asserted.

The 28-year-old broker’s role in the scheme allegedly began in 2007 or perhaps even earlier and lasted well into 201. The broker sought out people to apply for loans, using either conventional or FHA financing. The loans were to be used to buy properties that the broker either owned himself or for which he was acting as the broker.

Authorities say that the broker instructed the borrowers he recruited to use false information concerning employment and income on the loan applications. He then took steps to conceal the fraud from lenders.

The man’s sentencing is scheduled for April 4.

Source: “St. Louis real estate broker Hawkins pleads guilty to fraud,” St. Louis Business Journal, Greta Weiderman, 1-9-13

Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit our St. Louis white collar crime defense page.


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