A former Fannie Mae employee is going on trial this week after being accused of soliciting kickbacks from a real estate broker in exchange for foreclosure listings. Armando Granillo, a former foreclosure specialist at Fannie’s western regional office in Irvine, Calif., is arguing in court that he thought such practice was commonly accepted behavior.
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Granillo is accused of defrauding Fannie Mae for not trying to secure the best possible price on foreclosure sales, says the Los Angeles Times.
Prosecutors allege that Granillo told Arizona real estate broker Angus “Gus” Maughan that he’d allow Maughan to “cherry-pick” prime listings if Maughan gave him a 20 percent cut of the commissions in return.
"The scheme might have worked except for one thing," Assistant U.S. Attorney Stephen Goorvich said during opening statements. "Mr. Maughan called the authorities," who then secretly recorded a series of meetings. Granillo was arrested in May after accepting $11,200 in cash for what was really a videotaped federal sting operation.
The defense is arguing that Granillo faced “extraordinary stress” in fulfilling what he was told was Fannie Mae’s mission: to clear the foreclosures from the mortgage giant’s books. The defense attorney credits the efforts of Granillo and other sales representatives who pursued sales aggressively for Fannie Mae’s recent return to profitability.
"The evidence will show, yes, Mr. Granillo did intend to deceive," Deputy Public Defender Jeffrey A. Aaron, one of Granillo’s attorneys, told the court. "But he intended to deceive Mr. Maughan and not Fannie Mae."
Aaron argues that Granillo had no authority to approve sales at less than market value without reviews from higher-up employees. "He did what he believed to be the mission of Fannie Mae: to preserve, deliver, and sell properties as fast as he could," Aaron told the court.
One former Fannie employee says the act of accepting kickbacks for foreclosures is a widespread problem. In a separate pending state court lawsuit, another foreclosure specialist in Irvine, Calif., says that she was fired by Fannie Mae in 2011 because she tried to expose widespread corruption among specialists who were accepting kickbacks for property listings.