Former Fannie Mae Employee Found Guilty Of Making Millions On Shady REO Foreclosure Sales

Former Fannie Mae employee Shirene Hernandez is facing 40 years in prison. She was found guilty of accepting millions of dollars in bribes and kickbacks in exchange for selling Fannie Mae REO properties.

Federal prosecutors charged Shirene Hernandez in January 2018 with accepting bribes for steering foreclosures to certain brokers. She also allegedly bought some foreclosures herself at below market value.

Hernandez was found guilty of two counts of wire fraud counts.

The former Fannie Mae employee worked as an REO foreclosure specialist in California. Her job was to find buyers for Fannie Mae REO properties foreclosed on by Fannie Mae.

Hernandez would assign Fannie Mae-owned properties to real estate brokers and approve sales of the properties based on offers the brokers submitted from 2010 through 2015.

Former Fannie Mae Employee Took Kick Backs And Bribes

Hernandez approved sales of Fannie Mae REO properties at discounted prices to both herself and to brokers who paid her kickbacks.

Hernandez also received cash bribes in exchange for listings and commissions that brokers earned on real estate sales. Of course, these are violations of Fannie Mae rules and federal law.

In addition, Hernandez also assigned some listings to members of her family. They received almost $2 million in commissions in less than three years from the scheme. She also paid for one property with a duffel bag full of cash.

The former Fannie Mae employee also received more than $1 million in benefits from the scheme. This included cash kickbacks and equity in a Fannie Mae property she bought using kickback money.

Hernandez also bought a Fannie Mae-owned property that she was responsible for selling on behalf of Fannie Mae. However, she rigged the bid and approved a sale at a below market price to herself.

First, she sold the house on behalf of Fannie Mae to a company affiliated with a broker who was bribing her. Then, she directed the broker to transfer the property to Hernandez’s sister-in-law, who paid for the property with a duffel bag filled with $286,450 in cash that she received from Hernandez, an amount that was far below the market price.

From there, Hernandez made money on the house by renting it out.

A federal jury ordered Hernandez to forfeit the rental property to the government. The property is now worth hundreds of thousands of dollars more than the price Hernandez paid for it.

Hernandez faces a statutory maximum of 20 years in federal prison for each of the two felony offenses.

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Fannie Mae Employee Indicted For Accepting Bribes