Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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Rosa Conrado, San Bernardino, California, Saul Amador, West Covina, California, and Jesus Flores, Baldwin Park, California have been arrested and are believed to be members of a foreclosure fraud ring. Law enforcement officers have issued arrest warrants for Juan Perez, Grand Terrace, California, and David Giron, Ontario, California, who are also suspected to be involved in the scheme. The members are alleged to be participants of a fraud ring who preyed on desperate Southern California homeowners by falsely promising to renegotiate their home loans, but instead “ripped them off for thousands of dollars” while their homes fell into foreclosure. The Attorney General’s Office filed a 39-count complaint that includes multiple grand theft, money laundering and conspiracy charges against these suspects.
“It’s appalling how these scammers took advantage of desperate homeowners and ripped them off for thousands of dollars,” California Attorney General Edmund G. Brown Jr. said. “Our campaign against mortgage scams masquerading as foreclosure assistance will continue and even intensify.”
The arrests came after an investigation into First Gov, also operating as Foreclosure Prevention Services, uncovered that the company was soliciting hundreds of homeowners with mail flyers offering to help them stop the foreclosure process on their homes. The scammers falsely told homeowners that they would renegotiate their mortgages, reduce monthly payments, and transfer any delinquent loan amounts to the renegotiated principle. The company demanded an up-front fee, ranging from $1,500 to $5,000, to participate in the loan-modification program. The company also told the victims to stop any mortgage payments or communications with their lender, claiming they would interfere with the company’s effort to negotiate the loan modification.
When victims complained that they were still receiving delinquency or foreclosure notices from their lenders, fraud-ring members told the victims that the mortgage loans had been renegotiated, but the lenders needed a “good faith” payment to secure the new accounts. Homeowners made payments to accounts under business names such as “Reinstatement Department” or “Resolution Department” that made it appear as if the payment had been applied toward the loan. Bank records indicate that more than $700,000 was stolen from homeowners who fell victim to this scheme.
Typically, the scam initiated with a flyer sent to the homeowner. For example, Eleuteria and Arthur Washington of Redlands responded to a flyer she had received that falsely claimed to offer a way to renegotiate their home loan. On May 16, 2007, a representative of First Gov came to their residence. The Washingtons were asked for two cashier’s checks each for $2,023.58 (totaling $4,046.56), which equaled two times the combined total of the monthly payment on their first and second mortgage.
Although the checks were deposited that same day into the designated Bank of America account, Washington continued to receive letters from her lenders that the house would be auctioned. Washington’s numerous calls to First Gov went unanswered. Finally, she received a call from First Gov that her lenders had agreed to the loan modification.
The next day, Washington received another call from First Gov that the new loan documents would be sent to her to sign. She was told the lender wanted an additional payment and was instructed to make a deposit to Washington Mutual for $2,023.58. After Mrs. Washington made the deposit, she never heard from First Gov again. She later learned from her lender that the loan was never renegotiated, and the lender had never heard of First Gov. As a result of the scam, the Washingtons were cheated out of more than $6,000.
California homeowners should be aware the fraud ring’s flyer is still being circulated. The flyer is printed on goldenrod-colored paper in a yellow envelope. Occasionally, the contact name and number that appear on the bottom are changed.
“Loan-modification scams are becoming more and more prevalent across the country, particularly in California,” Attorney General Brown said. “California homeowners should be aware of the warning signs of foreclosure scams, so they don’t fall victim to these cynical schemes.”
The arrests are part of the California Attorney General’s ongoing crackdown on predatory lending and mortgage-fraud schemes in the state. In March, the Attorney General’s Office arrested Eric Pony and other members of Lifetime Financial Corporation for leading a similar mortgage-renegotiating scam that stole hundreds of thousands of dollars from California homeowners. Pony led the company in a predatory bait-and-switch loan-modification scam that targeted elderly and non-English speaking homeowners. The case is still pending in Los Angeles Superior Court.
Earlier this month, the California Attorney General’s Office secured $8.6 billion in loan relief for eligible homeowners in a landmark settlement with Countrywide Financial Corporation for engaging in deceptive and predatory lending practices that led many California families to lose their homes.
For homeowners who are behind in their mortgage payments or their home is already in foreclosure, services are available at little or no cost to help them save their home. For information about these services, consumers can visit http://www.yourhome.ca.gov or contact HOPE - Center for Foreclosure Solutions, a community-based organization that is available to assist them with foreclosure-related issues, at (888) 995- HOPE or online at http://www.995hope.org . Homeowners considering paying for foreclosure-assistance services, such as loan modification, should beware of anyone who tells them not to contact their lender or charges an upfront fee. It’s unlawful for companies that promise to help consumers in foreclosure to collect any money from them before they’ve done what was promised. Also, consumers should remember that they may not transfer title on their property to avoid foreclosure without the consent of their lender.
WELL,WHAT CAN I SAY,THE FACTS ARE PRESENTED TO LAW ENFORCEMENT ON THE CIVIL AND FEDERAL LEVEL AND NO ACTION IS TAKEN BY THESE GREAT PROTECTORS OF THE PUBLIC SAFETY.SCAM A KANSAS LENDER,AND AFTER THEIR ATTORNEY IN HOUSTON IS GIVEN THE FACTS,COPIES OF THE FALSE SALES,FALSE APPRASIALS AND THE PROPERTIES ARE INTENTIONALY LEFT TO ROTT HE SAYS THEY ARE NOT TRYING TO PUT HIM IN JAIL SOME PEOPLE WOULD GIVE UP BUT NOT A MAD AS HELL RETIRED NAVY MAN!!!! I CAN NOW SEE HOW PEOPLE LIKE MRS DOLLAR MUST FEEL I CALLED FANNY AND NO INTEREST WA MU NO RESPONCE,CITI WILL BE CALLED TODAY.THE KANSAS LENDER BIT ON 116 PROPERTIES.I WILL RECORD ON A DISC THE T/H SUBDIVISION KNOWN AS PINE VILLAGE NORTH IN HARRIS COUNTY TEXAS.THE PERSON WHO SHOULD BE IN JAIL LIVES IN COGRESSMAN TED POES DISTRICT AND YOU KNOW WHAT MY NEXT MOVE IS.WAXMANS OFFICE DID NOT RESPOND NOR SCHUMERS OFFICE. i AM 80 YEARS OLD AND MAD AS HELL. GEORGE UBER
Posted by on 11/06 at 03:25 AM
With the increase difficulty we are seeing in our market in Ann Arbor Michigan, I’m glad to see some of these “loan renegotiation” scammers broght to justice.
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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