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THE LATEST SECONDARY MARKET Executive Jailed for Mortgage Fraud Back in Court for Conspiracy A previously convicted perpetrator of mortgage fraud is given a new sentence for allegedly attempting to initiate a murder while in prison. A former company executive previously convicted of $100 mil- lion in mortgage fraud is facing new charges for his role in a murder conspiracy. Former AFG Financial Group Inc. President Aaron Hand, previously convicted for his role in reaping $100 million by way of mortgage fraud, pled guilty recently to trying to order a hit on the witness responsible for his current sentence, according to the Washington Post. The news outlet said that Hand pled guilty to conspiracy to commit murder, with prosecutors saying that he gave an undercover investigator money for a gun, along with detailed instructions and $2,000 for his trouble. He previously solicited $100 million in loot from loans he and a cadre of mortgage brokers and attorneys obtained by thieving proceeds from mortgages that banks made available to home- buyers, according to the Post. The news outlet said the investigator offered the court a recorded conversation in which Hand reportedly said, "I wish I was there to . . . watch him suffer." The onetime company executive could face 25 years to life if convicted on attempted murder, according to the Post, a number of years that would top the eight and 25 he continues to serve for his role in mortgage fraud. 72 | THE M REPORT Elsewhere in the legal system, the Justice Department recently released a report on Florida loan officer Louis Gendason, who has been sentenced by a federal judge to 70 months in the slammer, five years of supervised release, and $2 million in restitution fees for coordinating a reverse mortgage fraud scheme that targeted elderly borrowers. A statement from the Justice Department revealed that Gendason masterminded the effort with co-conspirators Kimberly Mackey and Marcos Echevarria to lure elderly borrowers in distress to apply for reverse mortgages, conceal real equity with a false kind obtained with fraudulent appraisals, and then abscond with actual equity. Mackey and Echevarria both received prison sentences lasting for 60 and 24 months, respectively, last year, with Gendason making the final defendant in the case. "The stiff sentence the court imposed on the leader of this reverse mortgage fraud scheme sounds a cautionary note to those who prey upon elderly, distressed homeowners," Tony West, assistant attorney general with the Justice Department, said in the statement. "We will not waver in our commitment to investigate, prosecute, and hold accountable those who try to victimize our nation's most vulnerable consumers," he added. Targeting FHA's Fund Seeking to stabilize the FHA's Mutual Mortgage Insurance Fund, lawmakers vote to approve new minimum premiums. House Clears Bill would shore up the Federal Housing Administration (FHA)'s ailing Mutual Mortgage Insurance Fund by setting annual premiums for mortgage insurers and reworking the agency's financial controls. Lawmakers seated on the A Insurance, Housing, and Community Opportunity subcommittee approved by voice vote the FHA Emergency Fiscal Solvency Act, fronting it for a full vote by the House. If approved by the lower chamber and reconciled with a Senate bill, the act would require minimum premiums from insurers every year, bar lenders in bad faith from participation in FHA loan guarantees, and mandate loss repayment by lenders guilty of defrauding the agency. "The FHA's cash reserves are down to dangerous levels, and tax- payers cannot afford another Fannie- and Freddie-style bailout," Rep. Judy Biggert (R-Illinois) said in a statement. House subcommittee cleared a bill in recent weeks that She called on the Obama adminis- tration to "enforce stronger standards and create room for the private sector to replace taxpayers as the primary source of funding. The FHA is facing an urgent fiscal crisis, and this pro- posal gives HUD Secretary Donovan emergency tools to wind down the risk before it's too late." The FHA continues to alarm policymakers for failing to keep adequate capital on hand for more than 7 million loans with insurance-in-force. With only about $2.6 billion in capital to meet $1 trillion in insurance needs, analysts say the FHA could require a draw of anywhere from $50 billion to $100 billion from the Treasury, citing still-falling home prices and the potential for more loan defaults. Critics charge that a recent proposal by the Obama administration to allow homeowners with private- label mortgages to refinance their loans by way of the FHA would only deepen fiscal distress for the government agency. SECONDARY MARKET ANALYTICS SERVICING ORIGINATION