Broker says she's guilty in subprime loan case

A Dorchester mortgage broker who helped unqualified home buyers secure subprime loans has pleaded guilty to forgery, larceny, and other criminal charges, the state attorney general's office said yesterday.

Nicole Lyder, 34, was sentenced Monday to two years in the Suffolk County House of Correction after entering a plea in Suffolk Superior Court. The allegations included providing false financial information about clients to lenders, qualifying them for loans they couldn't afford, and then collecting thousands of dollars in commissions.

Lyder entered a not-guilty plea in April and had been held on $500,000 bail, which was reduced to $100,000, before she changed her plea.

Lyder's attorney, Nancy Hurley, would not say why her client changed her plea. She painted a picture about why the change would make sense, however: Lyder was held for 285 days, she couldn't make bail, and now that she has pleaded guilty she will be eligible for parole in three months.

"There was an offer on the table," Hurley said. "I can't tell you what she was thinking."

Lyder, whose practices were the subject of a front-page Globe story last year, worked with low-income clients in Dorchester, Randolph, and Taunton. They later realized they could not afford their monthly payments and eventually had foreclosure cases brought against them.

Mortgage fraud is considered one of the main reasons for the surge in foreclosures nationwide - as well as for the inflated real estate prices that preceded the housing market collapse.

Lyder's case was one of several criminal actions involving mortgage fraud that Attorney General Martha Coakley's office brought last year.

Grace Ross, coordinator of the Massachusetts Alliance Against Predatory Lending, said exposing fraud is important because it shows how many people unknowingly bought properties they could not afford. The state also should seek restitution for those who lost their homes, Ross said.

Among Lyder's clients, one left a homeless shelter and two others gave up government-subsidized housing to buy homes.

"I see too often the story gets told [that] they should have known better," Ross said. "It would never occur to them that perhaps the broker had altered the figures. It is critically important it be exposed and these people be held accountable for what they did, but it is not enough."

The attorney general's office began investigating Lyder in September 2006, following a complaint about her mortgage activities. The investigation focused on mortgage loans Lyder helped applicants secure from Fremont Investment & Loan Inc.

The attorney general sued the California firm in 2007, alleging predatory lending practices. That case is still pending. A spokeswoman for Fremont declined to comment on Lyder's guilty plea or on its own case. Fremont has previously denied the charges.

State investigators found that Lyder forged business certificates and submitted other information to Fremont that exaggerated the home buyers' financial worth. Former clients said Lyder assured them the loans would be affordable and were thrilled she could help them buy a house.

In previous interviews with the Globe, Lyder has denied any knowledge of fake documents.

The attorney general's office also charged Lyder with fraudulent activity in July 2007 related to securing a loan for the purchase of a $63,000 Land Rover. Lyder altered a bank statement belonging to one of her former mortgage clients, making it appear as if it were her own, the state alleged.

Jenifer McKim can be reached at jmckim@globe.com.