A former foreclosure specialist at mortgage giant Fannie Mae’s Irvine office was caught accepting an $11,000 kickback from an Arizona real estate broker in exchange for steering foreclosure listings to brokers while a second employee of that office claims she was fired for trying to expose the illegal payments, according to the U.S. Department of Justice.
Armando Granillo, 44, of Huntington Beach, California was charged on March 26, with three counts of wire fraud for soliciting kickback while working for Fannie Mae.
Granillo, a foreclosure specialist at Fannie Mae, was arrested on March 5, 2013, after he allegedly accepted an $11,000 payment from an Arizona real estate broker, who at the time was working with federal authorities. Granillo, who pleaded not guilty, was freed on a $5,000 bond and his pending trial is scheduled on Aug. 6, in U.S. District Court in Santa Ana.
Granillo reviewed applications submitted by real estate brokers who wanted to list Fannie Mae foreclosure properties, which are known as REOs. He had the power to select the REO listing brokers, who make commissions on each sale.
In late 2012, Granillo asked a real estate broker in Tucson to pay a percentage of the commissions the broker earned for selling Fannie Mae foreclosure properties. Granillo demanded 20 percent of the 2.5 percent broker’s commissions. The broker brought the matter to the attention of federal law enforcement officials.
A sting was set up in Los Angeles and federal investigators wired the broker, identified in court only as A.M., for sound and video. In February 2012, Granillo traveled from Orange County to the Phoenix area, where he met with the broker. During the recorded meeting, Granillo stated that the kickback arrangement was a “natural part of business,” according to prosecutors.
According to the Justice Department, each wire fraud count carries a maximum penalty of 20 years in federal prison.
In September 2008, Fannie Mae bucked under the weight of mass defaults on the home loans it had guaranteed. Taxpayers spent $116 billion bailing out the company, which remains under U.S. government control.
Meanwhile, another former foreclosure specialist at Fannie Mae, Cecelia Carter, argues in an Orange County Superior Court lawsuit that Fannie Mae fired her in 2011 for trying to expose the kickbacks. Carter, 47, of Riverside, filed her wrongful termination suit this month.