Mortgage broker sentenced for mobile home fraud
The US Attorney General reportedly said that the owner of a defunct South Burlington brokerage who has defrauded more than 200 mortgage borrowers pleaded guilty this week to a federal wire fraud charge.
Richard Shumway, the owner of the brokerage will be sentenced November 3. Shumway’s victims are mostly from the state of New York. Shumway’s scheme was uncovered by lenders when the bank noticed a higher default with the loans that were brokered by the former. The bank has also complained to the FBI when they found that Shumway was committing frauds.
As reported by the Assistant U.S. Attorney Gregory Waples, Federal authorities were able to charge Shumway for his illegal activities when he lost his Vermont brokerage license. Shumway was involved with inflating the appraisals of properties for which he has brokered. Due to such inflated appraisals, buyers went for larger loans and the banks too easily offered them.
Most of the properties involved in the fraud were mobile homes in northern part of New York. When Shumway started off with his illegal practices, the buyers couldn’t make out what went wrong with the mortgage closing documents. Many amongst them were first time buyers, who were relatively unaware of the whole thing and had gotten easily deceived. The buyers were attracted to the lower interest rates that would help them save several dollars. The buyers lost around $2000-$10,000 while signing on a deal with Shumway.
Shumway’s accomplice, a real estate appraiser has pleaded guilty and awaiting sentence. Shumway is about to face 20 years of imprisonment with a fine of the greater of $250,000 or twice the amount of his gross profit.