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The principal and co-founder of a North Andover mortgage short sale assistance company will spend time in prison over a scheme to defraud mortgage lenders and investors out of nearly $500,000 in proceeds.

Jaime Mulvihill, 40, was sentenced in Boston federal court on Feb. 24 to six months in prison and two years of supervised release. She was also ordered to pay restitution in the amount of $478,458 and forfeiture of $239,229, according to a statement from the U.S. attorney’s office.

Mulvihill had pleaded guilty in November to conspiracy to commit wire fraud. The scheme involved about 90 short sale transactions and defrauded Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development.

Mulvihill and her co-defendant Gabriel T. Tavarez founded and operated Loss Mitigation Services LLC. The charges arise out of the defendants’ scheme to steal undisclosed and improper fees from mortgage lenders in connection with short sales of homes.

A short sale occurs where the mortgage debt on the home is greater than the sale price, and the mortgage lender agrees to take a loss on the transaction.

Loss Mitigation Services, purportedly acting on behalf of underwater homeowners, negotiated with mortgage lenders for approval of short sales in lieu of foreclosure. Mortgage lenders typically forbid short sale negotiators, such as Loss Mitigation Services, from receiving any proceeds of a short sale.

As part of the scheme, which lasted from 2014 to 2017, Mulvihill and, allegedly, Tavarez, directly or through their employees, falsely claimed to homeowners, real estate agents and closing attorneys that mortgage lenders had agreed to pay Loss Mitigation Services fees known as “seller paid closing costs” or “seller concessions” from the proceeds of the short sales.

The mortgage lenders had never approved Loss Mitigation Services to receive those fees, according to the U.S. attorney’s statement. When the short sales closed, at the instruction of Mulvihill, or others working with her and Tavarez, settlement agents paid Loss Mitigation Services the fees, which typically were 3 percent of the short sale price above and beyond any fees to real estate agents, closing attorneys and others involved in the transaction.

To deceive mortgage lenders about the true nature of the fees, Mulvihill or Tavarez filed, or caused others to file, false short sale transaction documents with mortgage lenders, including altered settlement statements and fabricated contracts and mortgage loan preapproval letters.

Mulvihill and, allegedly, Tavarez, fabricated the transaction documents, or caused them to be fabricated, in order to justify the additional fees and conceal that they were being paid to Loss Mitigation Services.

Tavarez has pleaded not guilty, according to the U.S. attorney’s statement.