Industry NewsMortgage

Former mortgage exec gets 13 years

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The former president of Hesperia, Calif.-based Mortgage One Corp. has been sentenced to 13 years in federal prison and ordered to pay nearly $30 million in restitution for what prosecutors said was his central role in a mortgage fraud scheme involving 905 FHA-backed loans.John Richard Varner, 56, is among 15 defendants convicted to date in a mortgage fraud scheme involving U.S. Department of Housing and Urban Development-approved Direct Endorsement Lenders Mortgage One Corp. in Hesperia and M-1 Capital Corp. in Riverside and Rancho Cucamonga.From 1997 to 2002, prosecutors said, the scheme relied on falsified loan applications and straw buyers to obtain FHA mortgage insurance on loans that Mortgage One and M-1 Capital funded and then sold to banks including Firstar Bank N.A. and Chase Manhattan Mortgage Corp.Prosecutors said Mortgage One and M-1 Capital also used falsified documents, including bogus audits, to obtain and maintain their FHA Direct Endorsement Lender status from HUD.The f...