Former Fannie Exec Sentenced to Prison for Fraud in Foreclosure Sales

Photo by: Dale Martin
January 16, 2020

A judge has sentenced a former Fannie Mae employee to six years in prison for accepting more than a million dollars in bribes and kickbacks when selling Fannie Mae–owned foreclosures for less than market value.

Shirene Hernandez, who formerly worked at Fannie Mae in California as a REO foreclosure specialist, was found guilty of accepting bribes in exchange for steering foreclosures to certain brokers. She was also accused of purchasing some of the foreclosures herself at below market value. Prosecutors say she netted more than $1 million from the scheme.

A judge has also ordered her to pay nearly $1 million in restitution back to Fannie Mae.

“The crime that [Hernandez] committed was egregious,” according to a sentencing memorandum written by prosecutors. “Rather than act in the public’s best interests … she used her position to line her own pockets.”

Hernandez’s job from 2010 to 2015 was to sell properties foreclosed on by Fannie Mae. She would approve sales of properties based on offers that were submitted from brokers.

Prosecutors, however, accuse her of demanding and receiving bribes from brokers in exchange for approving sales of Fannie Mae REOs at discounted prices that were below-market sales. She also was accused of helping several family members become Fannie Mae–approved brokers. Prosecutors say she steered nearly $80 million in Fannie Mae listings to her family members.

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