Three Charged For Allegedly Pocketing $10K Per Victim In Bogus "Principal Reduction" Loan Mod Racket; Part Of Larger Scam That Clipped 400 Homeowners

In Santa Clara County, California, the Contra Costa Times reports:

• A Santa Clara County criminal grand jury has indicted three people on 83 counts of defrauding 45 homeowners in Northern California in a wide-ranging loan modification scam. The Santa Clara County District Attorney's Office alleges Rene Alvarez, 39, and Mariano Ortega, 34, both of San Jose, and Cydney Sanchez, 60, of Los Angeles, stole more than $2 million from more than 400 homeowners — most of them Latino — in seven states, most of them from California.

• The grand jury found that in 2008 and 2009, Alvarez and Ortega owned and operated M & R Contemporary Solutions, a Campbell foreclosure consulting firm, according to prosecutors, and Sanchez owned and operated West Coast Mortgage and Horizon Property Holdings of Beverly Hills.

• Prosecutors contend M & R lured homeowners who were in various stages of the foreclosure process by pitching a "principal reduction" program. Homeowners were told M & R would save their homes by facilitating the purchase of their existing lender's loan by a third party at a discounted price. Sanchez was then supposed to provide the investors to purchase the loans. The homeowners were to be offered a new reduced-principal loan that would have significantly lower monthly payments.

• According to the homeowners and several ex-employees of M & R who testified before the grand jury, no homeowners were ever helped in this manner. In many cases, prosecutors say, homeowners paid $10,000 for the loan-buying scheme even though they had already lost title to their homes through trustee sales. M & R collected thousands of dollars in upfront fees from each homeowner in foreclosure, which is a felony, prosecutors said.

Source: 3 charged with defrauding 45 homeowners in mortgage scam.