Mortgage Broker Admits Defrauding S
A Huntington Beach mortgage broker pleaded guilty Monday in federal court here to charges that he defrauded Signal Savings & Loan in a multimillion-dollar scheme that regulators claim caused the thrift’s 1989 collapse.
Robert Herrera, owner of Huntington Beach-based United Security Mortgage Co., pleaded guilty to wire fraud and making false statements in using mortgages he didn’t own as collateral to secure a large line of credit from Signal.
Herrera, 47, could receive as much as a nine-year jail sentence and be ordered to pay $750,000 in fines. As part of a plea agreement, the U.S. attorney’s office is recommending that at least four years of the maximum sentence be meted out in the form of probation.
United Security purchased mortgages and then repackaged them for sale to financial institutions. Herrera used certain mortgages as collateral in order to get a credit line from Signal, even though some of the mortgages had already been sold to banks.
Chief Assistant U.S. Atty. Terree A. Bowers said Herrera carried out the scheme as part of a last-ditch effort to keep his sagging business alive. The company has since filed for bankruptcy.
Terry Bird, Herrera’s attorney, said his client regrets his actions.
Federal investigators are still trying to determine how much money Signal lost in the Herrera scheme.