The principal and co-founder of a North Andover mortgage short sale assistance company pleaded guilty this week in connection with defrauding mortgage lenders and investors out of nearly $500,000 in proceeds from about 90 short sale transactions.
Forty-year-old Jaime L. Mulvihill, pleaded guilty to conspiracy to commit wire fraud before U.S. Senior District Court Judge Rya W. Zobel who scheduled sentencing for next Feb. 25. As WHAV previously reported, Mulvihill was charged Nov. 8, along with co-conspirator Gabriel T. Tavarez.
U.S. Attorney Andrew E. Lelling’s office said the charges arise out of the pair’s scheme to steal undisclosed and improper fees from mortgage lenders in connection with short sales of homes. A short sale occurs where the mortgage debt on the home is greater than the sale price, and the mortgage lender agrees to take a loss on the transaction.
Loss Mitigation Services, purportedly acting on behalf of underwater homeowners, negotiated with mortgage lenders for approval of short sales in lieu of foreclosure. Mortgage lenders typically forbid short sale negotiators, such as Loss Mitigation Services, from receiving any proceeds of a short sale.
Lelling’s office said Mulvihill and Tavarez defrauded the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the U.S. Department of Housing and Urban Development.
According to court documents, from 2014 to 2017, Tavarez and Mulvihill, directly or through their employees, falsely claimed to homeowners, real estate agents and closing attorneys that mortgage lenders had agreed to pay Loss Mitigation Services fees known as “seller paid closing costs” or “seller concessions” from the proceeds of the short sales. In reality, the mortgage lenders never approved Loss Mitigation Services to receive those fees. To deceive mortgage lenders about the true nature of the fees, Tavarez or Mulvihill filed, or caused others to file, false short sale transaction documents with mortgage lenders, including altered settlement statements and fabricated contracts and mortgage loan preapproval letters.