Kirk Brannan, a 65-year-old resident of Lake Jackson, was sent to prison for defrauding Wells Fargo and other lenders in a $5 million mortgage fraud scheme.
Brannan is an attorney and real estate broker. His late father was the first Mayor of Surfside, a coastal village to the south of Lake Jackson. Brannan was an Alderman on Surfside council in the 1980’s
Brannan created false HUD-1 settlement forms (standard form in the US that lists fees and charges to the borrower in the purchase of real estate) and title documents that purported to show the sale of three of his properties to his children at grossly inflated prices. He then used these forms as comparable sales that appraisers relied upon in over-valuing the rest of Brannan’s beach home properties. He sold these properties at inflated prices.
Brannan sold 10 homes in the Freeport/Surfside area to straw buyers at two to three times the real appraised values. Other co-conspirators (to whom Brannan paid $2.4 million) recruited straw buyers who created loan applications with with fake information. As a result, Wells Fargo and others were induced to lend the inflated amounts. All the straw buyers defaulted on the mortgages and all 10 properties ended up in foreclosure.
The scheme ran from 2005 to 2009. The lenders lost $5.3 million in the scheme. Brannan was ordered to pay this amount in restitution.
Brannan pleaded guilty in 2018. He was sentenced to 36 months. Two other co-conspirators have also been sentenced for similar terms. A third will be sentenced later this month.