Former U.S. Mortgage Corp. President/CEO Michael McGrath, who the $247 million Picatinny Federal Credit Union alleges in court fraudulently sold $14 million worth of mortgage loans to Fannie Mae, isn't the only U.S. Mortgage employee implicated in the scheme.
"A letter we received from their attorney acknowledges that two different sets of records were developed and used by US Mortgage," said Picatinny attorney James Forte. "One showed that the loans were still in our portfolio, while another showed them belonging to Fannie Mae."
Forte said he doesn't know the identities of the other employees involved, but said there are at least two "John Does" that are also under FBI investigation.
Monday, Picatinny settled a related dispute with U.S. Mortgage's crisis management firm, NachmanHaysBrownstein, Inc., over the credit union's servicing rights and loan files. NHB wanted to sell U.S. Mortgage's servicing portfolio as one package to fetch a better price, and had named holdout credit union Picatinny as a factor in the company's recent bankruptcy filing.
"We have reached a consensual decision with the debtor, but it's still subject to bankruptcy court approval," Forte said. U.S. Mortgage's bankruptcy court convenes again March 20.