Atlanta No. 2 in Mortgage Fraud Nationwide--Defendants in $7 Million Mortgage Fraud Scheme to Be Sentenced Tomorrow
According to the Atlanta Journal and Constitution, Perimeter Mortgage Funding, which operated from 2001 to 2005 before collapsing, cost lenders $7 million. One of its principals, Kevin Wiggins has pled guilty to one count of conspiracy and two counts of wire fraud in the United States District Court for the Northern District of Georgia, and who faces up to 15 years in prison and a $750,000 fine and who will be ordered to repay the defrauded lenders. Wiggins' sister, Lydia Wiggins Christopher, and appraiser Frank Astwood have also pled guilty. The defendants will be sentenced on Tuesday.
Perimeter Mortgage Funding originated mortgage loans and sold them to larger lenders, including to Fannie Mae, Freddie Mac, Colonial Bank, JP Morgan Chase, Wachovia and Washington Mutual. It collapsed when it ran out of funds to reimburse purchasers of the fraudulent loans.
The prosecution claims that Wiggins would agree to purchase properties and then deed them to straw borrowers, who were really Wiggins' relatives and friends. The borrowers would then secure loans on the properties, either purchase loans or cash out refinancings, using falsified information, including inflated appraisals and false statements about renovations and rental income. Lenders were deceived by photographs showing false renovations and concealing damage to the properties. Wiggins used the proceeds of the loans to purchase the properties and to pay himself and his accomplices, including by having closing attorneys disburse checks to corporations controlled by him.
In all, Wiggins and his accomplices obtained inflated loans on 88 distressed properties, many in Atlanta's West End neighborhood. In one case, a loan for $128,000 was obtained for a home which was purchased for $24,000. Wiggins would not pay the mortgages, and the properties would go into foreclosure. Mortgage fraud by individuals such as Wiggins has made approximately 20 percent of the homes in West End vacant. Wiggins has claimed that he had good intentions for the properties, including a desire to rehabilitate the West End and rent the properties to students before selling them. West End residents Brent Brewer and Paulette Richards, have submitted a video to the court about their community's struggle with mortgage fraud entitled "When a House is Not a Home," and are asking for the maximum sentence for Wiggins.
A recent Fannie Mae report lists Atlanta as the second worst for mortgage fraud, only behind Minneapolis. In June, the United States Department of Justice began "Operation Malicious Mortgage," a nationwide crackdown on mortgage fraud. Last year, Phillip Hill and nine other defendants were convicted in Georgia's largest-ever mortgage fraud case.
Perimeter Mortgage Funding originated mortgage loans and sold them to larger lenders, including to Fannie Mae, Freddie Mac, Colonial Bank, JP Morgan Chase, Wachovia and Washington Mutual. It collapsed when it ran out of funds to reimburse purchasers of the fraudulent loans.
The prosecution claims that Wiggins would agree to purchase properties and then deed them to straw borrowers, who were really Wiggins' relatives and friends. The borrowers would then secure loans on the properties, either purchase loans or cash out refinancings, using falsified information, including inflated appraisals and false statements about renovations and rental income. Lenders were deceived by photographs showing false renovations and concealing damage to the properties. Wiggins used the proceeds of the loans to purchase the properties and to pay himself and his accomplices, including by having closing attorneys disburse checks to corporations controlled by him.
In all, Wiggins and his accomplices obtained inflated loans on 88 distressed properties, many in Atlanta's West End neighborhood. In one case, a loan for $128,000 was obtained for a home which was purchased for $24,000. Wiggins would not pay the mortgages, and the properties would go into foreclosure. Mortgage fraud by individuals such as Wiggins has made approximately 20 percent of the homes in West End vacant. Wiggins has claimed that he had good intentions for the properties, including a desire to rehabilitate the West End and rent the properties to students before selling them. West End residents Brent Brewer and Paulette Richards, have submitted a video to the court about their community's struggle with mortgage fraud entitled "When a House is Not a Home," and are asking for the maximum sentence for Wiggins.
A recent Fannie Mae report lists Atlanta as the second worst for mortgage fraud, only behind Minneapolis. In June, the United States Department of Justice began "Operation Malicious Mortgage," a nationwide crackdown on mortgage fraud. Last year, Phillip Hill and nine other defendants were convicted in Georgia's largest-ever mortgage fraud case.
