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Boca Mortgage Broker Pleads Guilty to Fraud

sun-sentinel.com | August 6, 2013

By Ben Wolford

A local mortgage servicer admitted he hid millions of dollars in paid-off loans from government-backed lenders Fannie Mae and Freddie Mac during the housing bust.

Boca Raton mortgage broker Patrick J. Mansell pleaded guilty Monday in Fort Lauderdale federal court to a single count of conspiring to defraud the U.S. government.

Fannie Mae says its damages exceed $28 million, according to a related civil complaint, in which Fannie Mae is suing Mansell, 68, and his company, Coastal States Mortgage Corp.

Neither Mansell nor his attorney could be reached for comment, despite calls and an email.

Mansell was an owner of Coastal States and oversaw its operations, primarily collecting mortgage payments from borrowers, prosecutors said in a charging document filed last month.

Coastal States was supposed to forward those payments to Fannie Mae and Freddie Mac in exchange for fees as payment for servicing the loans. Its contract required it send the full amount to Fannie Mae and Freddie Mac within two days.

But starting around April 2007, Mansell began collecting mortgage payoffs from borrowers and squirreling the money into other company accounts. Meanwhile, he covered the tracks by sending bogus reports along with the scheduled monthly payments.

"Mansell used the payoff funds ... for his own business purposes, resulting in additional profits for Coastal and the undue enrichment of defendant [Mansell] and others," prosecutors said.

Mansell accepted a plea deal Monday morning in Judge Robin S. Rosenbaum's courtroom, said Assistant U.S. Attorney Thomas Lanigan. A sentencing hearing is scheduled Oct. 15.

In the civil suit, Fannie Mae alleges other employees were aware of the scheme, which continued until the federal lenders killed Coastal States' contract in February and March 2012.

It is unclear from court records whether any borrowers were affected by the Coastal States scam. But many consumers were dissatisfied with the company's service, including Glendaly Martinez, of Pembroke Pines, who, like dozens of others, filed a complaint with the Better Business Bureau.

In December 2011, she received a letter from Coastal States announcing that her mortgage payments were increasing by about $300 "with no explanation," she said.

"You couldn't get in touch with anybody down there," she said. "It was the most horrible experience."

Another borrower's son, Adam Joseph, of Sunrise, said Coastal States had relocated its offices multiple times and that he had no idea where to mail his mother's mortgage checks.

Both said their problems were resolved by the spring of last year, when the lenders placed their loans with new companies.

This kind of poor customer service spurred the Consumer Financial Protection Bureau to institute fresh regulation over the loan servicing industry, renowned for shoddy record-keeping, mistakes and occasional corruption.


Back to August 2013 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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