A federal court has ordered Ron McCord, the former chairman and founder of First Mortgage Co., to make payments of $51.86 million to victims as restitution and serve over eight years in prison for defrauding business partners and consumers.
McCord, who served as the Mortgage Bankers Association chairman in 1997, pleaded guilty in May to five counts of
Oklahoma Western District Court Judge Robin Cauthron sentenced McCord to 104 months of incarceration, followed by three years of supervised release, for his role in a lending and servicing scam that victimized homeowners, government-sponsored enterprise Fannie Mae, and others, according to a Nov. 29 release issued by the U.S. attorney’s office. Cauthron found McCord caused a total loss of $95 million to these entities. His prison term will start Jan. 6, 2022.
“This was a carefully calculated scheme by which the defendant defrauded local banks out of tens of millions of dollars, made false statements to a financial institution, diverted
McCord pleaded guilty in May to five counts of
In addition to highlighting the extent of the personal penalties mortgage executives can face for engaging in fraud, the case illustrates how essential strong warehouse lending and secondary marketing relationships are to the operations of nonbanks in the housing finance business.
Charges in the case originally stemmed from an independent audit related to more than $14.1 million worth of loans McCord sold to two banks. The audit found that McCord failed to remunerate those banks, Spirit and Citizens State, after the mortgages got repaid through refinancing or other means. The two banks and their home lending subsidiaries then pulled warehouse financing they provided to FMC.
Subsequently, in 2017, McCord sought to find a new lender to fund the company’s loan pipeline and made what he later admitted was a materially false statement and representation as part of negotiations with the North Carolina-based CapLOC. The negotiations involved an offer to sell FMC’s lending business in exchange for funding.
McCord also admitted that he diverted escrow funds from $1.8 billion his company serviced for Fannie in 2017 to cover his company’s operating expenses, then
In addition to the independent audit and prosecution by the U.S. attorney’s office, the case resulted from investigations by the Federal Housing Finance Agency’s Office of Inspector General, the Federal Deposit Insurance Corp.’s OIG, and the Federal Bureau of Investigations’ Oklahoma City Field Office.
