The former servicing manager of U.S. Mortgage Corp. and its CU National Mortgage has pleaded guilty to conspiring to defraud credit unions and Fannie Mae in a $140 million scandal.
Leroy Hayden, 47, was convicted Thursday in the U.S. District Court in Newark, N.J., of conspiracy to assist Michael McGrath, the former president of U.S. Mortgage and CU National, in his scheme to fraudulently sell Fannie mortgages that the Pine Brook, N.J., company was servicing on behalf of credit unions.
Hayden told authorities he provided numerous reports to credit unions falsely stating that loans that had been sold were still in the credit unions' portfolios, and falsified records, at McGrath's direction, to conceal these fraudulent sales.
Hayden also admitted that he modified data in U.S. Mortgage's servicing system to help carry out the scheme.
As many as 28 credit unions stand to lose as much as $125 million in the case and are frantically negotiating with Fannie for the return of their mortgages.
McGrath pleaded guilty last June and is scheduled to be sentenced in July.