Joel Blanford earned more than $1,000,000 in commissions for doing fraudulent loans. Now he’s headed to prison.
Blanford was a wholesale account executive for Long Beach Mortgage. It was his job to visit mortgage brokers and persuade them to do their loans with Long Beach. Fueled by the love of money and pressure from management to bring in more and more loans, Blanford brought in $10 million in loans per month. How was that possible? By doing the impossible.
Blanford paid an assistant to create false pay stubs, W2s, and bank statements for his loan files. He also paid John Ngo, whose job it was to check loan files for quality, $54,000 in bribes to approve his “funny files.”
Ngo’s estranged wife told the FBI that she didn’t know how her husband, then 25, could afford their 4,500-square-foot Mission-style house at a price of $1.4 million. Ngo put down $350,000 cash for the house in 2005. His gross salary at Long Beach Mortgage was $4,500 a month.
But the blame doesn’t end there. Long Beach Mortgage bundled their loans and sold them in order to free up money to make more loans. And guess who thought it was prudent to purchase these fraudulent loans?
Supposedly stuffy, super-strict, go-by-the-book banks: Washington Mutual Bank and Chase Bank. These phony loans were a key factor in contributing to the demise of Washington Mutual. Here’s an example.
A woman who posted as eaglett1111 said Long Beach Mortgage approved her to buy a $350,000 house with zero down by over-stating her income. The loan officer told her, “Don’t worry about it. The home value will go up and then you can refinance into a better interest rate later.” Values didn’t continue to rise, her adjustable rate and payment increased. She couldn’t refinance, and she couldn’t afford her mortgage.
Back to million dollar commission man Joel Blanford. After four years, two trials, and one unsuccessful appeal, he was finally convicted last week by a federal court jury in Sacramento. His sentencing is set for December 10, 2012.
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