More On Mortgage Lender's Employee Who Was Allegedly Fired For Speaking With Law Enforcement About Fraud-Laced Home Loan

In Denver, Colorado, another story on former Aurora Loan Services' quality control employee Michael Walker was published in The Denver Post:

• His job was to uncover mortgage fraud. But he claims he was fired for doing it. In a lawsuit recently filed in Denver District Court, he claims Lehman's mortgage subsidiary wanted to remain profitably unaware of fraud.

• Aurora Loan Services is a subsidiary of Aurora Bank FSB, a $4.7 billion savings and loan based in Wilmington, Del., that used to be called Lehman Brothers Bank. Aurora and its affiliates weren't part of Lehman's bankruptcy filing. But Aurora Loan Services made all kinds of exotic loans — Alt-A, Alt-B, subprime — for Lehman to wrap into securitized bundles. This contributed not only to Lehman's demise, but what almost became the next Great Depression, the lawsuit alleges.(1)

• The case "is yet another example of a mortgage industry that believes it is above the law," said Walker's attorney, Mari Newman of Killmer Lane & Newman LLP in Denver. "Apparently, Aurora Loan Services was more interested in concealing potentially fraudulent loans than it was in allowing an honest and hardworking employee to respond to legitimate requests from federal law enforcement," she said.

For more, see Fired for doing his job, fraud finder sues.

(1) According to the story, Aurora made its loans through independent mortgage brokers, who often didn't have to meet any criteria to be brokers, not even criminal background checks in some cases. Inevitably, some percentage of the mortgage applications they took would be laced with fraud, the story states. But like everyone else, they reportedly got paid by loan volume, not by loan quality.