A federal jury will continue its mortgage fraud deliberations today, after Saundra McFadden-Weaver testified Wednesday that she never knowingly misrepresented information on loan documents she signed in 2005.

The jury received the case Wednesday afternoon after hearing the former Kansas City councilwoman testify that she never read the documents.

She “absolutely, completely” depended on the assurances of mortgage broker Ricky L. Hamilton that the deal was proper, she said.

“I’ve never intended to defraud anybody,” McFadden-Weaver said.

In closing arguments, however, assistant U.S. attorney Linda Parker Marshall dismissed McFadden-Weaver’s “good faith” defense, noting that she signed loan documents promising to repay the mortgage and live in the house, while telling others that someone else was responsible for making loan payments and saying that she never planned to live in the house.

“When Ms. McFadden-Weaver testified, she said she didn’t intend to defraud,” Marshall said. “I submit she didn’t intend for this to fall apart. She didn’t intend to face these consequences.”

McFadden-Weaver was indicted on mortgage fraud charges in January and is accused of falsely stating in mortgage papers that she planned to live in a Lee’s Summit home.

She has contended she got the loan as a favor for an acquaintance – contractor Emanuel Kind – who had promised to make the mortgage payments and renovate a house owned by her church.

McFadden-Weaver said she was surprised when Hamilton told her that she could qualify for a $400,000 mortgage because she knew her credit was not good. But, she said, Hamilton counseled her and prepared paperwork throughout the process.

“I never bought a house, and I didn’t know how that stuff works,” McFadden-Weaver said. “And I didn’t know how my name could hold a $400,000 house.”

Records show that McFadden-Weaver certified to the lender that she made $8,500 a month between her job as a church pastor and her City Council duties. That was far more than she was really making, however.

Under “stated income” mortgages, lenders can accept unverified income figures if the numbers appear “reasonable” and charge a higher interest rate.

Hamilton testified that he did a little research on what City Council members make, both here and elsewhere, and estimated what a pastor would earn.

“I told her I was putting down the amount of money that made the loan work,” Hamilton testified.

In May, the nation’s top bank regulator called on federal agencies to tighten the use of “stated income” mortgages in the subprime lending market. John C. Dugan, comptroller of the currency, said that nearly 50 percent of all subprime loans last year used unverified incomes.

In his closing arguments, McFadden-Weaver’s lawyer, Ron Partee, said his client is as much of a victim in this case as the mortgage lender.

“She is the victim of a swindle hatched by these two con men,” Partee said. “There are two victims here, there’s the lender and Saundra McFadden-Weaver.”

Kind lived in the house before it went into foreclosure last year. McFadden-Weaver testified that she didn’t realize that she was assuring lenders that she would live in the house – which was far outside the council district she represented at the time – when she signed paperwork at the closing in September 2005.

“I never read the papers and I never looked at it,” McFadden-Weaver said. “I agreed to sign to help (Kind) get his home. (Hamilton) told me it was completely legitimate. I signed the papers to help someone.”

Under cross-examination by Marshall, McFadden-Weaver acknowledged that mortgage lenders depended on the information in loan applications and closing documents. Many of those records warned of criminal penalties if information was intentionally false or misleading.

McFadden-Weaver lost a bid for re-election after her indictment in January. Both Hamilton and Kind have pleaded guilty.

McFadden-Weaver was composed and calm throughout her testimony, showing irritation only when describing an encounter with reporters from The Kansas City Star, who questioned her about the Lee’s Summit home. The Star’s article in August 2006 coincided with interest by the FBI in the loan. McFadden-Weaver later asked the Municipal Officials Ethics Commission to look into the matter.

After her indictment in January, the ethics commission found that McFadden-Weaver either intentionally lied or acted carelessly when she signed loan documents stating that she would occupy the house when she had no intention of living there.



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