Kamau Herndon was arraigned in federal court Tuesday on charges the former mortgage broker put together three fraudulent home sales surreptitiously, taking thousands of dollars for himself from each of them.
Herndon, 37, of Portland is the third former employee of Lighthouse Financial Group, a large Vancouver mortgage brokerage, to be charged with federal crimes. He is the son of Ron Herndon, a prominent community activist and director of Albina Head Start.
The Herndon case illustrates the powerful downward pull on property values exerted by the wave of mortgage fraud. The defaults and foreclosures that generally follow a phony home purchase can dramatically cut a home's market value. With mortgage defaults now surging in Oregon, the combined impact of the resulting foreclosures on housing prices could be formidable.
