A federal grand jury has indicted Donald V. Totten, who is alleged to have operated a mortgage brokerage business from Rancho Santa Fe, Calif., and obtained $2.2 million in mortgage loans using false information and siphoning hundreds of thousands of dollars from the sale of the properties.
Totten, who is alleged also to have been working as an unlicensed mortgage broker, could not be reached for comment. According to the Federal Bureau of Investigation, he is currently in federal custody and will be transported to the Southern District of California for further legal proceedings.
According to the indictment, Totten allegedly arranged a series of real estate transactions in complex scheme that in essence was a straw-buyer scam where some sale proceeds also were sent directly to his own bank account as kickbacks.
A loan processor that worked with Totten, Shellie Lockhard, in late July pleaded guilty to charges that she falsified application information for dozens of mortgages.
The indictment alleges Totten purchased four homes for the same straw buyer simultaneously and intentionally failed to disclose to each lender that the borrower was in the process of buying multiple properties.
After the four allegedly falsified mortgages defaulted and went through foreclosure both lenders and secondary market purchasers, including Fannie Mae and Freddie Mac, took losses, according to the indictment.
“Totten allegedly participated in a fraudulent scheme involving over $2 million in mortgage loans that ultimately defaulted, to the detriment of Fannie Mae, Freddie Mac and American taxpayers,” said
