Real estate mortgage fraud... someone finally got caught

This is what we like to see… people being punished for victimizing homeowners that are in foreclosure. We are contacted daily with people that tell us they were promised a refinance and were told not to make the mortgage payment. These people were strung along until the mortgage company issued a notice of default which immediately reflected on their credit report. The notice of default had a trickle-down effect which eliminated any refinance possibilities. With refinance out-of-the-way these companies then come in and offer to buy the house at a huge discount to stop the foreclosure. These stories with that we hear are very unfortunate and tragic but are ongoing across United States is illustrated in this article.

- This is an excerpt from an article posted by the Lawfuel.com - February 25, 2007. “LAWFUEL - US ATTORNEY - A Downey resident pleaded guilty today to federal fraud and money laundering charges, admitting her role in a $12 million real estate fraud scheme that targeted homeowners in default on their mortgages and falsely promised them help.

Martha Rodriguez, 35, pleaded guilty this morning in United States District Court in Los Angeles to one count of mail fraud and one count of money laundering in relation to the scheme that ran from May 2003 until November 2005.

By pleading guilty, Rodriguez admitted that she and several co-schemers located victim homeowners through computerized databases that list homes going into foreclosure. Rodriguez promised victim homeowners that their homes would get refinanced. However, instead of obtaining refinancing, Rodriguez and the other defendants charged in this case submitted loan applications in the names of “straw buyers” who were purportedly buying the property. In some cases, the straw buyers were paid for the use of their personal information. In other cases, the defendants used personal information of people without their knowledge. The loan applications for the straw buyers – which always contained false information – caused a series of lenders to fund mortgages. The loan proceeds were used to pay off the loan in default, and the remaining proceeds were skimmed off by Rodriguez and her co-schemers.

Even though they were promised that they would keep their homes, the victim homeowners lost title to their homes. The lenders suffered losses when the straw buyers failed to make loan payments and the second loans went into default. The scheme targeted commercial lenders and more than 100 homeowners across the Southland.

The scheme was operated through Rodriguez’s real estate and escrow agencies, Silvernet Properties in Downey and Bellasi Escrow in Seal Beach. As a result of her guilty pleas, Rodriguez faces a maximum possible sentence of 40 years in federal prison. Rodriguez has agreed to forfeit to the government her interest in five homes, a truck and approximately $900,000 in cash that was seized by the government around the time of her arrest…”lawfuel.com