A Houston family has been sentenced to federal prison for running a multi-million dollar mortgage fraud scheme that resulted in at least 70 homeowners defaulting on their mortgage payments.
Claymon Trammel, along with his wife Jeannettea Williams and their daughter Michelle Trammell, all pleaded guilty for one count of conspiracy to commit wire fraud.
From 2003 through 2006, the family recruited and paid individuals to act as straw borrowers on applications for residential mortgage loans processed by their business North Belt Mortgage, even though the borrowers had no intention of making payments on these loans or residing in the homes.
Some borrowers were used multiple times, including one whose name and credit was used to “purchase” approximately 17 homes.
Claymon pitched the scheme as an investment where the straw borrowers would not need any money down, would not be responsible for the monthly payments and would get money for the use of their name and credit.
During the scheme, the women were licensed mortgage loan officers. The daughter acted as a loan officer in the transactions and filled out loan applications in the names of borrowers and knowingly provided lenders with false information and documents about the borrower’s employment, income, assets and intent to occupy the purchased property. Both Michelle Trammell and Williams provided lenders with various false documents they knew were inaccurate, including false verifications of deposit, false verifications of rent and false earnest money contracts.
The defendants caused lenders to fund loans to purchase more than 70 homes in the Houston area, which ultimately defaulted and most ended up in foreclosure.
The family also personally benefited by conducting this scheme by funneling some of the loan proceeds to themselves through businesses they controlled and owned by using bogus repair invoices and realtor and loan officer commissions.
All of the defendants were ordered to pay $907,000 in restitution to various mortgage lenders. Claymon Trammell and Williams were assessed 60 months in prison, while the daughter was sentenced to 36 months.
