Top-producer and assistant charged in "large-scale" mortgage scheme
National Mortgage News
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A top loan originator and his aide are facing up to 30 years in prison after the Department of Justice indicted the pair for a "large-scale" mortgage fraud scheme Wednesday. Christopher J. Gallo, a former top loan officer at NJ Lenders Corp., and his assistant, Mehmet A. Elmas, are accused of falsifying origination documents while they both worked at the company. Specifically, over five years, the originators didn’t disclose to their employer and others when a borrower was buying a second property, thereby securing lower rates for consumers. In reality, some properties were being bought to be used as rental or investment properties, the DOJ said. During this time, Gallo originated more than $1.4 billion in loans. Industry stakeholders responded with confusion to the allegations, questioning why it took so long to catch the purported scheme.?
The number of fraud attempts on mortgage companies leaped by more than one-third between 2022 and 2023, with old methods becoming new again when it came to how the crimes were committed. Although companies are more vigilant of growing risk and focused on prevention, perpetrators are finding new ways to commit their crimes, leading to the higher number of threats, a new report from Lexisnexis found. Within the home lending segment specifically, businesses saw an average of 2,619 monthly fraud attempts last year, increasing 34.6% from 1,946 in 2022. Of the total average, a 54% share, or 1,417, proved successful, while 1,202 were prevented.?
Driven by a record three-month loss in the fourth quarter, independent mortgage bankers last year had their worst year ever in terms of per loan results, their industry association said. These lenders, along with bank mortgage subsidiaries, lost an average of $1,056 on each loan they originated in 2023, compared with an average loss of $301 per loan the prior year. In all four quarters last year, IMBs lost money on their production, including a $2,109 per loss during the last fiscal period of the year. Expenses rose to $11,258 per loan, which is also the most since the MBA started its study 15 years ago. For 2022, expenses averaged $10,624 per loan.
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Mortgage rates rose by another 7 basis points this week, and in the near-term, further increases are likely as the markets react to a weak gross domestic product report, Freddie Mac said. Yields on the 10-year Treasury rose to over 4.7% mid-morning on Thursday, following the news that the U.S. economy grew by just 1.6%, while inflation was up by 3.7%. The 30-year fixed rate mortgage rose 7 basis points to 7.17% on April 25, up from 7.1% the prior week and 6.43% for the same time last year, the Freddie Mac Primary Mortgage Market Survey found.?
The California mortgage giant posted a $39.3 million profit in the first quarter, following a $36.8 million net loss to close 2023. The rebound, also a 29% improvement from the same time last year, was driven in part by far smaller settlement obligations to technology rival Black Knight.? The multichannel lender recorded slight quarter-over-quarter declines in production pretax net income, coming in at $35.9 million, and overall volume of $21.7 billion. Its correspondent and broker gain-on-sale margins ticked up however, with the broker direct channel leaping from 79 basis points to close 2023 to 103 in the recent period. Its consumer direct lock volume was also up 35% quarterly.?
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Owner at All Things Fabulous, Inc.
6 个月My husband and I are victims of mortgage fraud, we live in Lubbock TX. Can anyone suggest a trustworthy attorney to speak with about our case. Our case involves collusion between the general contractor, lender, our banker, the loan officer, and title company. We have all documentation, voice recordings, emails, text messages, etc… any advice would be helpful.
VP Director of Mortgage Operations/Mortgage Broker at ZFG Mortgage LLC- NMLS # 216246
6 个月Justice. People like this saturate the market. All eyes on top producers. I wonder how many kickbacks to referral partners have not yet been uncovered. You know who you are
Mortgage Loan Officer at Wellby Financial CU.
7 个月What about the UW? They did not pulled the fraud report?
Private Mortgage Investments are for Texas investment property only.
7 个月This should have been caught by the underwriter or appraiser. Evidently the investor purchasing the closed loans failed with their own due diligence. The loan officer had a lot of people help him with his plot. Send them to jail.