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First Horizon has been named a world-class miscreant by the federal housing regulator known to none-and-all as the Federal Housing Finance Agency (FHFA).
The charge: First Horizon and its subsidiaries were on an expansion kick in 2005-2007 and packaged mortgages into sellable securities without divulging the crummy credit quality of some of them. Not unlike the rap against Morgan Keegan and its so-called Kelsoe funds.
"Defendants falsely represented that the underlying mortgage loans complied with certain underwriting guidelines and standards, including representations that significantly overstated the ability of the borrowers to repay their mortgage loans," says the FHNA lawsuit.
Named in the lawsuit are Gerald 'Jerry' Baker, CEO of First Horizon from 2007-2008 when he retired after a quarter in which the company lost $19 million, and Charles Burkett, who retired in June 2011 as president of banking at First Tennessee.
First Horizon's subsidiaries including First Horizon Home Loan and First Horizon Asset Securities "profited substantially from this vertically integrated approach to mortgage-backed securitization." The securities were issued in 2005 and 2006 "in an effort to increase revenue and profits in a rapidly expanding market. In 2005, First Horizon securitized $892 million in mortgage loans and in 2006 that figure nearly doubled to $1.74 billion. This meant higher fees, salaries, commissions, and bonuses for all involved, at least until the housing market crashed along with First Horizon's stock price in 2007.
"Defendants had enormous financial incentives to complete as many offerings as quickly as possible, without regard to ensuring the accuracy or completeness of the Registration Statement or conducting adequate and reasonable due diligence," the lawsuit says. It seeks $883 million from First Horizon.
In a section that raises questions about who is learning from whom, the lawsuit quotes from David Faber's book "And Then The Roof Caved In: How Wall Street's Greed and Stupidity Brought Capitalism to Its Knees." It describes the frenzy to create and sell "collateralized debt obligations" at financial firms such as Merrill Lynch. Morgan Keegan and First Horizon created such products.
"As Merrill headed into 2007, it had . . . a mission to get even bigger in the one area that had been so instrumental to all its success: mortgages. It wanted to originate more mortgages, buy more mortgages, package more mortgages into securities, and package more of those securities into [collateralized debt obligations]. And of course, it wanted to sell those securities and CDOs as fast as it possibly could, because that’s where the money was . . . In its quest to increase its market share, Merrill Lynch faced fierce competition from an increasing number of market players. The push to securitize large volumes of mortgage loans contributed to the absence of controls needed to ensure that the loans conformed."
One trick that First Horizon allegedly used was overstating the number of owner-occupied homes in its loan portfolio. Such homes have a better chance of repayment than second homes or vacation home.
One trick that First Horizon allegedly used was overstating the number of owner-occupied homes in its loan portfolio. Such homes have a better chance of repayment than second homes or vacation home.
A significant number of the loans failed two or more of these tests, indicating that the owner-occupancy statistics provided to provided to investors, like Fannie Mae and Freddie Mac, were materially false and misleading," the lawsuit says.
The lawsuit says that some First Horizon employees were aware of the "rampant underwriting failures" and filed a lawsuit against the firm based on their investment of employee retirement plans in First Horizon's stock.
The employees alleged that First Horizon's national expansion strategy consisted primarily of opening offices around the country, without regard to credit review or accounting. The flaws in First Horizon’s processes were so serious that the company failed to attain compliance with applicable regulatory guidance during 2006 into 2007. The lawsuit says First Horizon’s compensation practices and staffing favored short-term product growth over proper risk management.
http://fhhmcaught.blogspot.com/
DID FIRST HORIZON'S VICTORIA ALLEN, EPHRIAN HARRIS, SHAVONDA YORK, TOMIKO ALSTON, OR DARRELL BOOKER HAVE ANY INVOLVEMENT IN YOUR CLOSING DOCUMENTS? ALL ARE LOCATED IN VIRGINIA.
First Horizon Home Loan Corporation Branch Manager pleads guilty to fraud
Updated: Thursday, 15 Dec 2011, 3:08 PM EST
Published : Thursday, 15 Dec 2011, 3:08 PM EST
NEWPORT NEWS, Va. (WAVY) - Victoria Allen, 57, of Chesapeake admitted in court Wednesday that she is guilty of orchestrating a mortgage fraud scheme.
Allen was charged of conspiracy to commit mail and wire fraud on November 29, 2011. She faces up to 30 years behind bars when she is sentenced in March.
As part of her plea agreement, it came out that Allen pulled off the fraud along with several others, while she was the loan originator and branch manager of First Horizon Home Loan Corporation in Chesapeake. Ephrain Harris owned and operated Can Do Accounting, in the City of Newport News and was engaged in preparing tax returns and other accounting services. Another conspirator, Shavonda York, worked as a mortgage broker and owned and operated USA Processing and Destiny Consulting. Tamiko Alston operated a local title company and Darrell Booker owned a local business. Harris, York, Alston and Booker have been convicted and sentenced for their participation in the conspiracy.
The way the scheme worked was the conspirators falsely obtained financing from First Horizon Home Loan Corp. to fund closings on residential properties. They would use seller proceeds to fund the property transactions and purchase cashier's checks without the mortgage lender knowing.
According to the U.S. Attorney's Office, a review of loan files and other documents showed Allen submitted false pay stubs or W-2 forms for at least 13 conventional loan transactions. The notes on certain loans were then purchased by other companies that sustained losses when the loans went into default and were sold at foreclosure.
A review of FHA loan files and other documents indicated the defendant knowingly submitted to the lender false pay stubs and/or W-2 forms for at least 19 FHA-insured loan transactions. The FHA maintains a database named “ Neighborhood Watch ” that is used to track the performance of FHA-approved brokers and lenders. According to Neighborhood Watch, for the time period July 1, 2008 through June 30, 2010, the branch of First Horizon Home Loans that Allen supervised had a seriously delinquent ratio of 30.30 percent, the highest rate in the state of Virginia for that time period. Losses in property values related to the scheme approached are known to be at least $1 million.
1. | Cadmus Credit Union, Incorporated  | Available | Richmond, VA | Victoria L Allen (VICE PRESIDENT) Jackie Baskerville (OFFICER) Patricia Bridgewater (SECRETARY) William M Groome (PRESIDENT) Donald W Hill (TREASURER) Donald W Hill (REGISTERED AGENT: ATTORNEY) Lisa Mullins (SECRETARY) Anne R Shepperson (VICE PRESIDENT) |
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| Person | Phone | Address | City, State | Possible Employers / Business Afilliations | |
|---|---|---|---|---|---|
| 1. | Victoria L Allen | Richmond, VA | Cadmus Credit Union, Incorporated |
3. | Valerie Alston | Yuba City, CA Rocky River, OH | Alston Enterprises, Inc | ||
| 4. | Valerie Alston | Lebanon, IN Mesa, AZ | Maximum Acuity Group Llc Maximum Acuity Group, Llc |
2. | Tommy R Alston Associated names: Tom Alston | Available | Cocoa, FL Cpe Canaveral, FL Penrose, NC Merritt Island, FL Cape Canaveral, FL | Alston Properties, Inc Dogwood Mountain Estates, Inc Dogwood Mountain Estates, Inc |
| es | ||||||
|---|---|---|---|---|---|---|
| 1. | Valerie Tomika Alston Associated names: Tomika V Alston T Alston Valerie | 48 | Available | Available | Miami, FL | Daisy Lee Alston (Age 68) Kim L Crittendon (Age 49) Daisy L Alston (Age 67) Daisy Crittendon (Age 68) Possible Roommates / Associates: Julio E Davila (Age 62) |
| 2. | Tomika D Alston | 31 | Available | N/A | Washington, DC |
| atives | ||||||
|---|---|---|---|---|---|---|
| 1. | Darrell D Booker Associated names: Darryl D Booker Daryl D Booker | 42 | Available | Available | Midlothian, VA Chesterfield, VA Fort Rucker, AL Leesville, LA | Cynthia Lorraine Booker (Age 47) Michelle Andrea Vecchiarelli (Age 44) Myrtle J Booker (Age 49) Booker Andre Lamont (Age 41) Pw Andre Booker Darryl D Booker Michelle Renee Booker (Age 42) Andre Booker |
| oyers / Business Afilliations | |||||
|---|---|---|---|---|---|
| 1. | Darrell M Booker Associated names: D Booker | Available | Richmond, VA | Dreamtecs Designs Inc Guda Music Entertainment Inc Guda Music Entertainment Inc Set It Off Productions Dreamtecs Designs, Inc Guda Music Entertainment, Inc | |
| 2. | Darrell E Booker Associated names: D Booker Booker Darrell | Available | Chesapeake, VA Newport News, VA Suffolk, VA Hampton, VA | Booboo Inc Booboo Inc Booboo Inc | |
| 3. | Darrell L Booker | Available | Irving, TX | Byrons Group | |
| 4. | Darrell Booker | Richmond, VA | Jd Homes And Properties Inc Jd Homes And Properties Inc Jd Homes And Properties, Inc | ||
| 5. | Darrell Booker | Habo, Inc | |||
| 6. | Darrell Booker | Governors Beach Mansion, Inc | |||
| 7. | Darrell Booker | Newport News, VA | First Place Communications Incorporated | ||
| 8. | Darrell Booker | Richmond, VA | Dreamtecs Designs, Inc | ||
| 9. | Darrell Booker | Newport News, VA | Booboo Inc | ||
| 10. | Darrell Booker | Richmond, VA | Guda Music Entertainment, Inc | ||
| 11. | Darrell Booker | Newport News, VA | Gmb Entertainment Llc |
4. | Daryl Booker | Alpharetta, GA | Bookerinccom, Inc Bookerinccom, Inc Bookerinccom, Inc |
7. | Darryl D Booker | Available | Rialto, CA | Certified Talent |
| 1. | Darrell D Booker Associated names: Darryl D Booker Daryl D Booker | 42 | Available | Available | Midlothian, VA Chesterfield, VA Fort Rucker, AL Leesville, LA | Cynthia Lorraine Booker (Age 47) Michelle Andrea Vecchiarelli (Age 44) Myrtle J Booker (Age 49) Booker Andre Lamont (Age 41) Pw Andre Booker Darryl D Booker Michelle Renee Booker (Age 42) Andre Booker |
2. | Usa Processing Services | Available | Available | Tustin, CA | Edgar Gonzalez (CONTACT) |
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| 3. | Usa Processing | Available | Available | ||||||||||||||||||||||||||||||||
| 4. | Usa Processing |
| Available | Tampa, FL | Anita Diaz (PARTNER) |
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12. | Usa Processing | Available | Silver spring, MD |
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| 13. | Usa Processing Services, Inc | Available | Long beach, NY |
7. | Usa Processing | Available | Tampa, FL | Anita Diaz (OWNER) |
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ness Afilliations1.Ephrain D Harris
Associated names:
Ephran D Harris
Ephraim Williams
Ephrain D Harris Newport News, VA | 49 years old
| Previous Locations | Newport News, VA | Charlotte, NC View full addresses >> |
| Aliases | Ephraim Williams |
| Relatives | Ayesha J Garrett | Deloris Williams | Ehprain Harris | Ephbian Harris | Geraldine B Williams | Pamela J Williamsharris |
AvailableCharlotte, NC
Newport News, VA
Can Do Real Estate Inc
Can Do Real Estate Inc
Can Do Rental Properties Inc
Can Do Rentals Inc
Can-do-real Estate Inc
Can-do-real Estate Inc
E & E Investment Company
Hitch Hike Towing Inc
Tolvers Remodeling & Maintenance Inc
Can Do Real Estate Inc
Can Do Rental Properties, Inc
Can Do Rentals, Inc
Can-do-accounting, Inc
Can-do-real Estate, Inc
E & E Investment Company
Hitch Hike Towing, Inc
Tolvers Remodeling & Maintenance, Inc
2.Ephrain D Harris
Newport News, VA
Can-do-accounting, Inc
3.Ephrain D Harris
Newport News, VA
Can Do Rentals, Inc
4.Ephrain D Harris
Newport News, VA
E & E Investment Company
5. | Ephrain Harris | N/A | N/A | Hampton, VA Newport News, VA | Cynthia C Mann (Age 70) Timothy Harris | |
| 6. | Ephrain Harris | N/A | N/A | Hampton, VA | Ephrian Harris | |
| 7. | Ephrain D Harris | N/A | N/A | Charlotte, NC |
| latives | ||||||
|---|---|---|---|---|---|---|
| 1. | Ephrain D Harris Associated names: Ephran D Harris Ephraim Williams | 49 | Available | Available | Charlotte, NC Newport News, VA | Pamela J Williamsharris (Age 51) Geraldine B Williams (Age 91) Deloris Williams (Age 37) Ayesha J Garrett (Age 36) Harpamela J Williams J Williamsharpamela Ephbian Harris Ehprain Harris Possible Roommates / Associates: Justin Jaymes Hansen (Age 39) |
| Afilliations | |||||
|---|---|---|---|---|---|
| 1. | Shavonda R York | Hampton, VA Newport News, VA | Destiny Consulting Llc | ||
| 2. | Shavonda R York | Available | Newport News, VA Yorktown, VA | Destiny Mortgage Services Inc Destiny Mortgage Services, Inc |
The Federal Housing Finance Agency sued 17 banks, including Memphis-based First Horizon, which is the parent company of First Tennessee Bank. The suit against FHN was over $883 million in residential mortgage-backed securities issued to Fannie Mae and Freddie Mac in connection with five First Horizon-sponsored and First Horizon-underwritten securitizations.
But only $379 million of that amount is still outstanding, Reynolds noted.
http://blog.memphisdailynews.com/?p=2979
Getting hit by an $883 million judgment could stagger First Horizon National Corp. just when the Memphis company is recovering from the banking meltdown.
46. | Pei Che Hsu Inc | Available | Sugar land, TX | Pei Che Hsu (REGISTERED AGENT) |
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| Business Name | Phone | Address | City, State | Possible Owners/ Officers/Agents | Associated Businesses | |
|---|---|---|---|---|---|---|
| 1. | Pei Acquisition Corporation | Available | Available | Harvest, AL Huntsville, AL | Paul Gulbis (SECRETARY) J Thomas Noojin (INCORPORATORS) J Thomas Noojin (REGISTERED AGENT) Jewell Toney (REGISTERED AGENT) Jewell Toney (PRESIDENT) |
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| 2. | Pei Acquisitions Corporation | Available | Available | Huntsville, AL Wilmington, DE | Paul Gulbis (SECRETARY) Jewel Toney (REGISTERED AGENT) Jewel Toney (PRESIDENT) |
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