U.S. prosecutors are charging Robert Pena with fraud. Pena, who is the founder and president of Mortgage Security— a mortgage company that is no longer in operation—was indicted on wire fraud and conspiracy charges.
Court documents state that Mortgage Security was contracted with the Government National Mortgage Association, also known as Ginnie Mae. Its job was to pool eligible residential mortgage loans and sell mortgage bonds that were backed by Ginnie Mae to investors. Mortgage Security also was supposed service the loans, including collecting payments plus interest from the borrower ( in addition to loan payoffs) and putting the money in accounts that Ginnie Mae held in trust. The funds were to eventually go to investors.
However, contends the indictment, starting in 2011, Pena allegedly started moving the funds that borrowers sent to Mortgage Security into secret accounts without Ginnie Mae’s knowledge. He purportedly used the money for business and personal expenses, eventually taking close to $3M. He allegedly tried to conceal his scam through false reports that he issued to Ginnie Mae regarding the loans. Ginnie Mae wound up having to pay investors because it had guaranteed their investments.
Ginnie Mae is run by the government. The corporation is supposed to make housing more affordable through the infusion of capital into the housing market. It guarantees the payment of principal and interest in a timely fashion to investors who’ve put their money in mortgage-backed bonds in which the mortgage loans are sponsored by the government.
If convicted for conspiracy, Pena is facing up to 20 years behind bars and other penalties. For the criminal wire fraud, he could also go to prison for up to 20 years.
Mortgage company president charged with stealing $3 million from Ginnie Mae, Housing Wire, August 18, 2016
Mortgage Company President Charged with Defrauding Ginnie Mae, Justice.gov, August 18, 2016