Loan Officer Sentenced to 5 Month Prison Term

Rachel Dollar —  February 25, 2016 — Leave a comment

David B. Pick, Bowie, Maryland, was sentenced to 5 months imprisonment to be followed by 3 years supervised release.  He was ordered to pay restitution of $383,178.  He previously pled guilty to making false statements arising from a real estate closing.

As previously reported by Mortgage Fraud Blog, Pick was a loan originator responsible for preparing loan applications, obtaining documentation to support the representations in loan applications, presenting loan applications to financial institutions for funding and working with financial institutions to close loans.

In 2005, Pick sought a $900,000 construction loan from a mortgage lender to purchase and construct a residence at 1206 Tilghmans Landing Way, Annapolis, Maryland.  The residence was to be constructed by Richland Homes, Inc., owned and operated by Timothy Ritchie, 44, Annapolis, Maryland . 

According to his plea agreement, on March 10, 2005, Pick falsely represented on the loan application that he received $1,250 in monthly rent from “Georgia Brown” to rent property on Clam Cove Court, Rock Hall, Maryland.  In fact, no individual named Georgia Brown occupied the property or paid rent to Pick.

Relying on the false loan application, the lender agreed to fund the construction loan on the condition that Pick personally pay the required down payments, closing costs and prepaid expenses, and that Pick did not have any agreement with Ritchie or Richland Homes, as the seller, that was not disclosed to the lender.

On March 21, 2005, Pick and Ritchie signed a settlement statement, and Pick also signed a borrower’s affidavit, falsely stating the Pick paid $63,901.63 at the closing, when in fact, Pick contributed no cash to the closing.  The funds owed by Pick were instead deducted from Richland Homes’ proceeds from the sale.  The lender, which would not have approved the loan without Pick paying the full $63,901.63, suffered a loss of $383,178.

Rachel Dollar

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