NFL Star Irving Fryar Indicted for Mortgage Fraud
Former football standout Irving Fryar was indicted last week in New Jersey for allegedly scamming nearly $700,000 through mortgage fraud. His mother was also included in the indictment for conspiracy and theft by deception.
Fryar played wide receiver for the New England Patriots, Miami Dolphins, Philadelphia Eagles and the Washington Redskins during a 16-year NFL career.
According to the indictment, he and his mother took out six loans on her house in less than a week in December 2009 using false information, spent much of the money and defaulted on the loans.
“It’s disappointing that someone with an illustrious career in professional sports who now is a minister and coach in the community is charged with this crime, but he must face justice like anyone else,” Acting Attorney General John Hoffman said in a statement.
If convicted, Fryar could face up to 10 years in prison.
According to a recent report by Lexis Nexis, New Jersey is one of the top states for mortgage fraud, rising significantly from 10th place for fraud investigations in 2011 to sixth last year. Florida continues to be the number one state for mortgage fraud in terms of investigations, with Nevada in second place.
“Analysis of all loans investigated in 2012 shows a five-year high of 69 percent of all reports received having some type of Application misrepresentation or fraud,” the report states, noting that the high percentage isn’t surprising because of the breadth of information required on an application. “Application fraud and misrepresentation includes, but is not limited to, the following categories on the loan application: incorrect name(s) used for the borrower(s); occupancy, income, employment, debt and asset misrepresentation; different signature(s) for the same name(s); invalid Social Security number(s); misrepresented citizen/alien status; incorrect address(es) or address history; and incorrect transaction type.”
While some misrepresentation might be accidental, what Fryar is charged with is much more serious. “This is not a case in which Mr. Fryar and his mother simply omitted or misstated information on loan applications,” Hoffman said. “This indictment alleges that they engaged in an elaborate criminal scheme that was designed to defraud these banks of hundreds of thousands of dollars.”
In September, the Consumer Finance Protection Board issued a new set of rules that will go into effect in January to help ward off mortgage problems before they occur. “Mortgage lenders and brokers will be wise to consult the updated procedures as they make compliance systems changes to implement next year’s regulatory overhaul,” writes Heather C. Hutchings, an attorney with Dykema.
One of the new rules is that lenders “make a reasonable, good-faith determination that prospective borrowers have the ability to repay their loans.” Fryar’s mother allegedly lied about her income on her loan applications, so it’s unclear if the new rule would have caught the discrepancy, but more so than protecting banks the rules are aimed at protecting consumers from purchasing a home that they would be able to afford payments on and subsequently losing it to foreclosure.
Among other changes are clarifying what lenders can do in the first 120 days after a homeowner goes delinquent on a payment and making it easier for homeowners to find help finding the best possible way out of their predicament if they fall behind.