Origination News Article

Origination News, By Lew Sichelman, October 2003

Origination News
JACKIE FREE DOES NOT LOOK like a convicted felon. She’s petite, five-foot-two, if that, and blonde and low-key. But there she stood at the Florida Association of Mortgage Brokers annual convention, an admitted ex-con who pleaded guilty to wire fraud, mail fraud, and bank fraud.

The former loan officer in Boca Raton didn’t get any jail time. But she did spend six months under house arrest with a monitor strapped around her ankle. She’s also on probation and has to perform 500 hours of community service. And oh yes, there’s that little matter of a $98,000 restitution fine.

Still, that’s not nearly as bad as being caged behind bars. For the 30 months between the day she was nabbed by the authorities and the judge pass sentence, she went to sleep every night wondering if that would be the last time she slept in her own bed. It never came to that. But it’s hardly been a picnic. She can’t vote because she is a convicted felon. She can’t even be a crossing guard because she has a record. She needs to obtain the judge’s permission before she can travel. The worst part, however, is what she put her family through. At the very least, she says, it is “very degrading.”

Funny thing is, though, Free didn’t do anything most other loan officers don’t do. Basically, all she did was fudge on a few lines here and few lines there – the types of things that go on everyday in the mortgage business.

And now she’s talking about her experience – the panic, the shame, the endless interrogation – in hopes that she can convince other loan officers not to make the same mistakes she did. It is, she said, “part of the healing process.”

In 1999, her 14th year in the business, Jackie Free was a top producing loan officer who thought she was doing a good job because she took care of her customers. Heck, if a borrower needed a few bucks to make the deal work at closing, she’d cut her commission. “I put my heart and soul in the business,” she told the FAMB.

Then one day her office was raided by the FBI – guns drawn. She thought it was some kind of joke, but, as she soon found out, the only thing funny that was going on was what people in her office were doing to get loans approved by funding lenders. The FBI nailed 20 people that day, but Free said they could have gotten just about everyone in the office for something.

For her part, though, she “didn’t think she had done anything wrong.” All she did was put a friend’s name on a fake lease so it looked to the underwriters as though the borrower had rented his previous place rather than sold it. But everybody does that. All she did was bump up another borrower’s income by $200 a month so he could qualify for his stated-income loan. But that type of things goes on everyday in every office in the land. She also used the same credit letter. She didn’t check the box on the verification of employment that asked if the borrower was self-employed and she listed an investment property as a second home. But everyone does those things, too.

She’d still be doing them herself if she wasn’t caught. “All the things I was doing I though I was helping people. That’s how I justified it,” Ms. Free said.

But she was caught. And while it “took me a long time to admit to myself that what I was doing was just as bad” as any other criminal who had defrauded someone, she now is able to stand in front of people and tell her story.

“If I can help just one person, it will be worth it,” she says. Her message: Be honest. Don’t lie about anything on a loan application. Don’t even stretch anything. Don’t alter anything.