CLEVELAND, Ohio -- A Cuyahoga County grand jury on Wednesday indicted nine employees of California-based Argent Mortgage Inc. for their suspected roles in approving fraudulent home loans.
It's the first time in Ohio and one of few instances nationwide that a mortgage fraud investigation has led to criminal charges against employees of a subprime lender, Cuyahoga County Prosecutor Bill Mason said.
Argent, which was one of the biggest originators of home loans in Cuyahoga County from 2003 to 2005, was sold to Citibank in 2008.
This case, investigated by the Cuyahoga County Mortgage Fraud Task Force, presents a primer about how the lending practices of Argent and other subprime mortgage companies were largely responsible for the foreclosure crisis that devastated Cleveland and its inner-ring suburbs. Worldwide, the meltdown of the subprime mortgage market starting in 2007 resulted in the deepest economic downturn since the Great Depression.
The indictment alleges that Argent employees helped coach mortgage brokers about how to falsify loan documents so that they misstated the source or existence of down payments as well as borrower's income and assets. Employees at an Argent loan processing center in Illinois ultimately approved the loans knowing that the company's own lending rules had not been satisfied.
Ryan Miday, a spokesman for Mason, said Argent employees bent the rules to get loans approved in order to inflate their wages and bonuses.
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