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.
