Opinion ID: 858507
Heading Depth: 2
Heading Rank: 1

Heading: The Plainfield Property

Text: Unlike the other two properties at issue in this case, after Wendlandt prepared the false documents to qualify a buyer for the HUD-insured loan to purchase the Plainfield property, the buyer successfully sought a loan modification that reduced the monthly payment. HUD was required to make a $26,076.90 insurance payment to the lender, which equaled the amount by which the lender reduced the loan as a result of the modification. The district court found that this amount represented the actual loss attributable to Wendlandt. Wendlandt contends that in the case of a performing loan, any loss to HUD would be the difference between the appraised fair market value of the property and the balance remaining on the loan (according to his computation, $72,616.46). He argues that because the appraised value—either the government’s appraisal of $96,900 or Leppek’s appraisal of $107,500—exceeds the loan balance, the loss is zero. However, as the district court found, the cost of the subsequent loan modification constitutes a reasonably foreseeable, calculable loss to HUD that falls squarely within the definition of actual loss under § 2B1.1 cmt. n.3(A)(i), (iii). When Wendlandt fraudulently procured the HUD-insured loan for the otherwise unqualified borrower, he knew, or reasonably should have known, that the borrower might have to seek a loan modification to maintain monthly payments on the mortgage. Serendipitously for Wendlandt, the buyer of the Plainfield property was able to obtain the loan modification rather than resort to other alternatives such as default, which would have resulted in a much higher loss. Moreover, the loss amount adopted by the district court was a reasonable estimate supported by a preponderance of the evidence. Agent Russell and Kathy Coon testified that $26,076.90 was the amount of the insurance claim filed by the lender, that HUD was required under its insurance program to pay this difference in the modification, and that this was a permanent loss because HUD would not receive reimbursement if the owner sold the house for a higher price. Thus, the district court did not clearly err in its loss calculation pertaining to the Plainfield property. No. 11-2018 USA v. Wendlandt Page 9