Former Fannie Employee Took Bribes to Discount Properties
February 19, 2019
A former Fannie Mae employee was found guilty of accepting millions of dollars in bribes and kickbacks in discounting foreclosure properties and selling them for below market value.
Shirene Hernandez, a former REO specialist with Fannie Mae in Irvine, Calif., was found guilty of two wire federal fraud counts. From 2010 to 2015, Hernandez was in charge of selling Fannie Mae–owned foreclosures to real estate brokers and approving sales of the properties based on the offers the brokers submitted.
The court says that Hernandez approved sales of Fannie Mae–owned properties at discounted prices to herself and to the brokers who agreed to pay her kickbacks. The court also found that she received bribes, mostly in the form of cash payments, in return for listing and commissions that brokers earned on the real estate sales.
According to court documents, Hernandez received more than $1 million in benefits, such as cash kickbacks and equity in property she obtained with kickback money. In one incident, Hernandez purchased a Fannie Mae–owned property in Sonoma, Calif., in which she was responsible for selling on behalf of Fannie Mae. She rejected higher, market-priced offers and accepted her own below-market price and made the transaction using her sister-in-law and the help of a broker. Hernandez then rented out the property and earned proceeds from it. The property is now worth hundreds of thousands of dollars more than the purchase price.
Hernandez was forced to forfeit the property to the U.S. government as part of the jury’s verdict. The court also found that Hernandez used her position at Fannie Mae to assign listings to her own family members, who had received nearly $2 million in commissions in less than three years.
Hernandez could be facing up to 40 years in prison. She will be sentenced May 13.
Department of Justice/Central District of California and “Former Fannie Mae Employee Found Guilty of Making Millions on Shady Foreclosure Sales,” HousingWire (Feb. 15, 2019)
Updated: October 29, 2020