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The Mortgage Compliance Dragnet – April 2017

Long Island Man Sentenced To 15 Years In Prison For Defrauding Homeowners In Loan Modification Scheme

Date Published:  March 7, 2017

BROOKLYN, NY – Earlier today, David Gotterup was sentenced at the federal courthouse in Brooklyn, New York, to 15 years in prison for leading a loan modification scheme that defrauded distressed homeowners. Gotterup pleaded guilty on June 16, 2016, to conspiring to commit wire, mail and bank fraud. In addition, as part of the sentence, the Court ordered Gotterup to pay $2,500,050 in forfeiture.[1]

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); David Montoya, Inspector General, U.S. Department of Housing and Urban Development (HUD); and Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

According to public filings, from 2008 to 2012, Gotterup and his co-conspirators made a series of false promises to convince more than a thousand distressed homeowners seeking relief through government mortgage modification programs to pay thousands of dollars each in advance fees to numerous companies owned or controlled by Gotterup, including Express Modifications, Express Home Solutions, True Credit Empire, LLC, Green Group Today, Inc., The Green Law Group, Inc., and JG Group. Among other things, Gotterup directed telemarketers and salespeople to lie to distressed homeowner victims by telling them that they were “preapproved” for loan modifications and that they were retaining a “law firm” and an “attorney” who would complete their mortgage relief applications and negotiate with the banks to modify the terms of their mortgages. Contrary to these representations, Gotterup and his co-conspirators did little or no work in connection with these fraudulently induced advanced fees. Gotterup was arrested in October 2015 and has been incarcerated since then…

Final Civil Action – Security National Mortgage Company Settled Allegations of Failing To Comply With HUD’s Federal Housing Administration Loan Requirements

Date Published: Thursday, March 2, 2017

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice, Washington, DC, and the U.S. Attorney’s Office for the District of New Jersey in a civil investigation of Security National Mortgage Company.  Security National is a Federal Housing Administration (FHA)-approved mortgage lender with its principal place of business located in Salt Lake City, UT.

On September 22, 2016, Security National entered into a settlement agreement with the Federal Government to pay $4.25 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation.  As part of the settlement, Security National agreed that for 100 FHA-insured loans, it engaged in certain conduct in connection with its origination and underwriting of the loans.  The settlement was neither an admission of liability by Security National nor a concession by the United States that its claims were not well founded.

As a result of Security National’s conduct, HUD insured loans approved by Security National that were not eligible for FHA mortgage insurance and that HUD would not otherwise have insured.  HUD incurred substantial losses when it paid insurance claims on the loans covered by the settlement agreement.

 

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