The Falmouth-based mortgage broker accused of abetting an apparent mortgage fraud by Senate President Troy Jackson (D-Aroostook) denied any wrongdoing on Thursday in a phone interview with the Maine Wire.
In a story published Thursday morning by the Portland Press Herald, Jackson appeared to blame his mortgage broker for allowing him to sign a 2019 Federal Housing Authority (FHA)-insured mortgage agreement which he now admits to violating.
“I paid him a lot of money,” Jackson said of his broker. “He filled out the forms and me and my wife signed them.”
“This is unfortunate, but I never really read the forms,” he said. “I was going off his interpretation.”
Jackson signed his name to the agreement, initialing every page of the document.
Jackson’s allegation against his mortgage broker came in response to real estate and court records — first reported on by the Maine Wire — that raised the question of whether Jackson supplied false information in order to obtain the FHA-backed loan for an Augusta home he bought in Sept. 2019.
According to Jackson, any issue with the loan is the fault of his mortgage broker, not him.
Under the FHA loan program, the federal government will insure a mortgage, making it less risky for a bank, but only if the buyer attests that the house will be their primary residence.
In return, the buyer can purchase a home with less money down and get a lower interest rate than your typical mortgage.
The program is intended to help low-income families buy their first homes.
According to the FBI, it is illegal to use FHA loans to buy and flip investment properties.
Per the FBI, occupancy fraud has occurred when a borrower claims that they will make a property their primary residence in order to obtain a loan but never fulfills that occupancy requirement.
The FHA loan agreement Jackson signed required him to make the Augusta house his principal residence for at least a year, but he now says he never satisfied that legal obligation.
In Dec. 2021, Jackson sold the property in Augusta for a net gain of more than $100,000, according to publicly available real estate records.
Jackson’s comments to the Portland newspaper were his first on-the-record remarks about the controversy since the Maine Wire began reporting on his home purchase, and he laid blame for any discrepancies with the FHA loan agreement at the feet of his mortgage broker.
In a phone interview Thursday, Michael G. Wilson, the broker who originated Jackson’s FHA mortgage, denied any wrongdoing and said his firm, Guild Mortgage of Falmouth, always follows federal law when it comes to FHA loans.
“I mean, he’s a Senator. You’d think he would read forms and understand them,” said Wilson.
“We follow the FHA guidelines very closely,” Wilson said. “We didn’t commit any crimes. We underwrite guidelines, they read the applications and fill them out.”
“Something seems a little fishy here,” he said.
The title company that performed the closing for Jackson’s FHA loan was Two Light Settlement, which has an office in Portland and Augusta.
As part of the mortgage process, Two Lights Settlement would have been responsible for guaranteeing that the transaction was executed legally and that a trustworthy notary had ensured the parties understood the agreement.
Reached by phone, Carly Joyce of Two Light Settlement declined to comment on Jackson’s loan or the company’s approach to ensuring borrowers understand the terms of loan agreements.
Christine Kirby, Jackson’s legislative spokesperson, did not respond to questions submitted by the Maine Wire about Jackson’s accusation.
Jackson’s ownership of a residence 2.1 miles from the State House from Sept. 2019 to Dec. 2021 prompted Rep. John Andrews (R-Paris) to file a complaint this week with the Maine Ethics Commission.
The subject of that complaint is whether Jackson violated the requirement in the Maine Constitution that members of the State Legislature reside in their districts while they serve.
Although Jackson has remained registered to vote in Allagash, has registered his car in Allagash, and claims to have filed taxes as an Allagash resident, he has also admitted to spending the “majority” of his time in Augusta since becoming a legislative leader.
The Ethics Commission will hear Andrews’ complaint at its next regular meeting on October 25.
Any federal criminal issues related to the FHA loan fall under the jurisdiction of the U.S. Attorney of Maine Darcie McElwee, a Biden appointee.
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- Maine Republicans Call for Investigation Into Senate President After Maine Wire Report Details Residency Requirement Violation, Potential Fraud
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- Ethics Complaint Against Troy Jackson Officially Filed Over Residency Requirement Violation, Potential Fraud