Law enforcement authorities raided the headquarters of United Mortgage Trust in Grapevine, Texas, on Feb. 18, seeking documents related to the company's management.
The officers were acting on a search warrant issued by a federal magistrate of the United States District Court for the Northern District of Texas, according to a
United Mortgage did not disclose additional details about the purpose of the raid.
"The Trust does not believe that it or its officers, trustees or employees have violated any laws or regulations, and it intends to cooperate fully with the government's investigation," United Mortgage said in the filing. "The Trust cannot, however, predict what additional action, if any, government authorities might take in the future."
The raid follows a response issued on Feb. 8 by United Development Funding IV, an entity affiliated with United Mortgage, to a website about the company created by the Dallas hedge fund Hayman Capital Management. Hayman, which is controlled by Kyle Bass, accused United Mortgage's management of running a Ponzi-like real estate scheme.
The website contains "multiple false and misleading statements about our company and management team," Hollis Greenlaw, United Mortgage's chief executive, said in the response.
"Our secured loans are underwritten based on collateral value, and UDF IV has not had any realized losses in its portfolio," Greenlaw said. "We are confident that we have appropriate policies and procedures in place to ensure accurate financial reporting and compliance with all applicable rules and regulations."
Hayman has built a short position in United Development and hopes to profit from a decline in the company's shares, Greenlaw said.
United Mortgage is a real estate investment trust that invests in pools of residential real estate loans.
