Former Colonial Bank Exec to Plead Guilty


Former Colonial Bank executive Catherine Kissick is supposed to plead guilty on March 2 to charges related to mortgage fraud.  According to reports, she assisted Taylor Bean Whittaker in selling at least $700 million of phony mortgages to Colonial Bank.  Various experts say another $500 million to $1.1 Billion worth of mortgages were sold to Colonial despite the fact TBW didn’t own them any more. They’d already been sold to other investors, sometimes TWICE!

Sort of explains why TBW was ready to buy a 75% share in Colonial in order to bail out the bank so it could get TARP money. TBW needed more control over covering up the fraud, it needed the gravy train to continue, and it SURE didn’t need regulators closing Colonial and rooting around in the paperwork details.  That plan didn’t work out so well.

Unfortunately, the Catherine Kissick revelations didn’t seem too shocking to me.  I’d suspected as much. What stunned me was when I started doing some research to get some more details about her story.  Not many details yet on Ms. Kissick, but I did find lots of blogs commenting on the bogus mortgages.  The blogs pretty much say the same thing–TBW was squeaky clean compared to some of the other big originators in the country.  One blogger, who worked in the industry, said that TBW quality control, audit trails, and underwriting was far superior to the others. That’s a scary thought, isn’t it?

What does this mean to you?  Do not take anything for granted when involved in a short sale or a loan modification.  Make sure you are dealing with the right party, who really owns your mortgage loan.  Yes, you owe the money. BUT, you are entitled to deal with the right lender, because they all have different philosophies, procedures, guidelines and staffing levels to deal with your request.  Some lenders might turn you down, others might give you what you want.

That all begs the question: How do you find out who really owns your mortgage loan?  As a start, anything originated by TBW is suspicious, isn’t it?  Next, ask for a scan of the blue ink original of the note, and a notary certification under oath that it is a true and correct copy of the original note, which is in the possession of that particular lender.  Yes, notaries have been known to lie. But, I bet it’s a lot less common after the robo-signer scandals.

Good luck!