Mr. Mayne,

I poke around on the internet occasionally for mortgage fraud related topics. Today I came across your website. I am 37 years old. I have been employed within the real estate industry since the mid–1990s. This business is all I have ever known. I read about the time you had to tell your kids you were going to prison for 2 years. You explained to your young children you would be gone for two Santa Claus's. I began to cry for two reasons: I too am a Dad and have a very similar story to share with you.

In the early 1990s I was newly married and began working as a closer for a large mortgage banking institution. I learned voraciously; I was passionate and I loved my job. I moved on to become a processor, and eventually, an underwriter. I was good at what I did and proud of it. I became the go to guy for everyone in the office. I was adept and well versed in all facets of the business.

Business was changing rapidly. We were entering a refinance era. The mortgage market was booming. The advent of new loan programs, automated underwriting and new processing styles, meant we were reinventing the business on a daily basis. Life was going extremely well. My wife and I had our first child.

My career continued to move ahead. One day a sales manager within the company approached me. He said, "Quit the inside and become a loan officer. With your knowledge base and your skills, you'll make a lot of money."

I was hesitant to become a loan officer since the compensation was 100% commission. I had a wife, an 18–month–old son and a second child on the way. We were managing on my $36,000 annual salary but I was working 12 hour days. I knew what commissioned loan officers were making and I wanted better for my family.

I made the leap to become a loan officer. In the first month I closed $2,500,000 in mortgage loans. My paycheck was in excess of $17,000! I had sales directors and division managers contacting me. I was offered branch management positions, territory manager positions and headhunters from competitors were calling me. I was a star!

I closed $25,000,000 in loans my first year as loan officer. My wife and I had money we never dreamed of. My job was flexible, I had the ability to make my own hours and life was grand. We had two beautiful children and a third on the way. Business was humming along. We were spending money and not saving a dime. The economy was blessing the masses with never before seen interest rates.

Then, the bottom dropped out. Rates went up. We were in the throes of a depression and I became a common commodity; a struggling loan officer.

My self–esteem was destroyed. I was no longer the star and there were no more five figure paychecks. Each day was a struggle and filled with worries. I lost my self–worth; I let my family down since I was the sole provider for my family. Previously no one had to worry because I always handled it. Overnight it was all stripped away. Eventually we filed bankruptcy and I made a series of horrendous personal choices.

Next, I started working for a lifelong friend at a small broker's office who offered a generous commission split. I was beginning to get back on track. Business was steady but much slower than it was in years past.

The owner of the mortgage company across the street approached me. He asked if I could help him with two refinances. I agreed and he gave a complete set of all the documents used when he originated the loans to be refinanced six months earlier.

I dug in and looked over the files. The two loans totaled over $5,500,000. The borrowers had excellent credit, huge deposit accounts and the loan to value of the properties used as collateral for the loans was within reason.

The following Monday an individual representing both borrowers contacted me and indicated these two loans were a test. If I successfully closed these there would be many more. Later in the week, the same parties contacted me to handle purchase loans for eight multimillion–dollar properties in exclusive metropolitan areas of Detroit representing over $20,000,000 in loan production. 

I was given phone numbers and credit reports for all borrowers. Each borrower was applying for loan programs based on stated income or no–documentation loans. The borrower's representative was not at all concerned with what the loan fees or points would be. He indicated I should use my discretion and charge whatever I wanted. I searched the history of the properties which revealed they had been listed for sale and sold often with increases in sales prices each time.

I wasn't stupid, or naïve; I knew exactly what they were up to. I began using the same justification process you used while closing loans for Milt. I started saying "everyone else is doing it" and "I'll just do a couple of these sketchy loans, then I'll get out." I spent three months on these loans; there were countless phone calls at all hours of the day and night, shady individual after shady individual and the growing pit in my stomach was bigger by the day.

One day I got my wits about me and realized I had uncovered a house flipping scheme where a property is purchased for let's say $1,200,000. Next the buyer sells the same property to someone else for $3,500,000. The buyer would pay the original seller from the profits received on the sale where the buyer obtained an 80% loan to value mortgage on the $3,500,000 purchase price.

This resulted in a profit of $1,600,000 for the first buyer. The second buyer would escrow 18–24 months of payments and keep the properties insured so no one suspected anything was wrong. Each property was easier to appraise because of the comparable created by the previous transaction which just closed. The sales prices were all inflated because the appraiser was in on the scheme. It was brilliant.

But Jerome, this is where our paths did not cross. While working on these files I would lay awake at night and became irritable. I was a nervous wreck. I couldn't do it. I never submitted a loan to underwriting. I would always make up a problem which would convince them to take the transaction to another lender.

Black Monday, at approximately 8:30 AM the Secret Service and the FBI raided the office across the street. I watched them carry out box after box of files, CPUs from the office as evidence. Several people were escorted from the building in handcuffs. Just 150 yards from my office door I watched it all happen and I cried. I cried for the destruction of countless families, reputations and inevitable failure of my competitor. It only took the Agents 40 minutes to complete their tasks.

I thank God every day for giving me the fortitude to say no.

Jerome, my best wishes to you. Please keep spreading your message. This industry needs more like you.