Ronald McCord Pleads Guilty to Mortgage Fraud
The president of the Mortgage Bankers Association in the late 1990s, who was also the owner of Oklahoma City-based bank and lender First Mortgage Company, pled guilty to five charges of bank fraud, money laundering, and misrepresentations to a banking institution.
Over the course of three years, a federal grand jury in
Oklahoma’s Western District suspected Ronald McCord of cheating mortgage
companies Spirit Bank and Citizens State Bank, Fannie Mae, and others. McCord
admitted guilt on May 11 to “out of trust” peddling upwards of $14.1 million in
Spirit and Citizens loans.
He discharged the loans after collecting payoffs at two
homes in Leland and Denver, North Carolina, instead of repaying the loans after
the loans were remortgaged or paid off.
When Spirit and Citizens learned of McCord’s mortgage
fraudulent activity, they terminated any additional loans to First Mortgage
Company and demanded that McCord transfer the loans to them. First Mortgage
Company still had $340 million in financial liabilities on the banks’ lines of
credit when the federal complaint was discovered.
McCord began looking for a new bank in early 2017 when
Spirit and Citizens ceased supporting his company’s loans. He focused his eyes
on CapLOC, a housing finance company situated in North Carolina, and attempted
to sell CapLOC First Mortgage Company’s lending arm for a fast profit. In an
effort to seal the sale, McCord allegedly made fraudulent assertions.
McCord was also successful in defrauding Fannie Mae, who was
taken advantage of by First Mortgage Company’s residential mortgage division.
His firm provided loan servicing for the
government-sponsored enterprise, which totaled around 12,000 loans totaling
$1.8 billion. First Mortgage Company’s running expenditures were covered by
McCord via the use of escrow accounts, which are often used to collect
homeowner’s taxes and insurance payments. And he used the money to cover a
customized homebuilder who was constructing McCord’s property in Colorado, a
practice known as money laundering.
In addition to his commercial interests, McCord served as
President of the MBA in 1997, according to evidence he gave before the United
States Senate that same year. At the moment, the job was a volunteer job, in
contrast to the present post of president of the trade organization, which is a
paid staff job now held by Bob Broeksmit.
McCord may face a fine of up to $1 million for each count of
financial fraud and making a false statement to a banking institution, as well
as a jail sentence of up to 30 years. For laundering money, he may face an
extra ten years in jail and a $250,000 fine.
However, it is improbable that he will be sentenced to that
long of a jail term. As part of the plea agreement, the government decided that
it would not seek a sentence of more than 8.5 years in prison. It also ordered
to dismiss the remaining 19 charges of the prosecution against the defendants.
The amount of compensation he will have to repay to his
victims will be determined by the court during his sentence. In addition, he
will lose the revenues of his loan fraud schemes as well as the properties that
were engaged in the scams.
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