By Janet Jacobs
Corsicana Daily Sun
Corsicana —
Editor’s note: Local business-owners Lynn and Kandace Marriott had a seemingly charmed life until their business deals turned crooked and both went to prison along with various members of their family. This is the third installment of a four-part series on their downfall.
Coming Thursday: Why did it happen?
Even for Texas, a state rife with wheelers and dealers, the document factory operated by Lynn and Kandace Marriott was something new, according to David Glickler, the Assistant Texas Attorney General who prosecuted the case at the request of the Navarro County District Attorney.
“The scope and breadth of this scheme is something which is unprecedented,” he said. “As the evidence came out the magnitude of the fraud on a daily basis is just grander than anything I’ve seen, anything we’ve seen.”
Heading up the federal investigation was Tammy Hernandez with the Office of the Inspector General/ U.S. Dept of Housing and Urban Development (HUD).
Even the federal government isn’t sure how much was really lost in the Marriott deals except to say it was in excess of $4.3 million in Navarro, Henderson, Kaufman and Wilbarger counties.
“The actual number would exceed this amount if the resources were available to review the more than 4,000 loans that were originated by the various lenders,” Hernandez stated in an e-mailed response to questions from the Corsicana Daily Sun.
After the investigation began to make headway, the Marriotts closed their Navarro offices and reopened a similar operation in Kaufman County. That company was called Torenia Inc. but it worked the same.
Participating in the investigation were officials from the Corsicana Police Department, the FBI, Attorney General’s office, and HUD.
The federal investigators got involved because the loans were guaranteed by the U.S. government. When the inevitable foreclosures came, the American people had to pay back the loans.
At least 72 people lost their homes, but the federal government believes that number to be higher, perhaps much, much higher. The Marriotts got away with it for as long as they did because they weren’t the lenders, Hernandez said.
The Marriott's company was a manufactured home retailer performing lender functions, she explained. The irregularities were reported by the Corsicana Police Department, Wells Fargo Bank, and the HUD Quality Assurance Division. The company was suspended from doing business with HUD in 2006, but the Marriotts moved their company to another county, changed the bank and forced the hounds on their heels to start all over, Hernandez said.
“With the help of the FBI and the Kaufman County District Attorney's Office this was accomplished in a short period of time and we were able to shut down their entire operation in August 2008,” Hernandez said.
Nationally, a little mortgage fraud does happen, and particularly during the earlier part of the decade when the real estate market was red hot, Hernandez said.
“During the period that the Marriott's were being investigated (it was) not uncommon in the mortgage industry to find an altered document or two in a loan file. However, to find the majority of documents in the file altered or just completely false created a unique situation,” she wrote.
“The fact that the same documents and explanations were being utilized in several files and just being submitted to different lenders created a challenge.”
The cost to the American taxpayers isn’t clear even now because a foreclosure isn’t the end of the process.
“HUD administers the FHA mortgaged insurance program which insures the lender against losses,” Hernandez said. “When a borrower stops making payments for whatever reason, the lender forecloses on the property and then files a claim against the FHA insurance. After the claim is filed, HUD pays the lender off and then assumes the property. HUD maintains the up-keep of the property until it is resold, which in most cases is at a loss.”
On Wednesday, a spokesman for the Texas Attorney General’s office said with relief “It’s over.”
In reality, though, the impact of the Marriott’s businesses could reverberate for decades.
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Janet Jacobs may be reached via e-mail at jacobs@corsicanadailysun.com. Want to “sound off” to this article? E-mail: Soundoff@corsicanadailysun.com
