Suffering From Foreclosure Scams
May 28 2008 - Elias Escobedo, 41, lost his house earlier this month when it was foreclosed on, but not because he didn’t pay his mortgage.
Instead, he’s the victim of a real estate agent who is accused of forging the deed to his home and embezzling $40,000 in a scheme to raise his credit score and pay his monthly mortgage payments, according to the Contra Costa County District Attorney’s office.
Mortgage and foreclosure fraud is growing. According to the FBI 2007 Mortgage Fraud Report, suspicious activity reports grew 31 percent to 46,717 in 2007. The 1,204 mortgage fraud cases pursued in fiscal year 2007, which ended September 30, resulted in 321 indictments and court orders for $595.9 million in restitution. In the Bay Area, counties are ranked by mortgage fraud with Santa Clara being the highest and then followed by Alameda and Contra Costa counties. The regional FBI office declined to release any further statistics.
“Financial crimes affect the economic security of millions of Americans, and the FBI is dedicated to working with our partners in industry and law enforcement to combat these offenses,” Kenneth W. Kaiser, assistant director of the FBI’s Criminal Investigative Division, said in a statement.
According to the FBI, there are now 1,380 fraud investigations open this month. California is the fourth-ranked state with significant mortgage fraud, after Florida, Nevada and Michigan.
Escobedo, a landscaper, occasionally stays at the home on Richard Place where he still cuts the lawn and maintains the home although he now lives with his mother in downtown Pittsburg.
“I feel stupid because I put my trust in him,” he said. “I invested all my life savings with him.”
His agent was the same real estate agent that sold the home to Escobedo in 2004. Escobedo said that Bullard told him his credit was bad and he could come up with a way to clean it up and invest the money, he said. Using a straw buyer to hold the property, or someone paid to park the deed, they would refinance the home, take money out and pay the mortgage.
The agent, Rodney Alonzo Bullard, has been charged with grand theft and two felony counts of forgery by the Contra Costa County district attorney’s office.
All numbers for Rodney Alonzo Bullard were either not in use, disconnected or were to businesses that now have no ties to Bullard.
“It’s a common type of criminal arrangement, where the victim is going through foreclosure and they transfer the title to themselves or someone else and say that after a year, they will give the house back,” said Ken McCormick, deputy district attorney.
Money was set aside, about $40,000, which was supposed to go to pay for the home but did not, McCormick said. “No mortgage payments were being made and it was going through foreclosure,” he said.
This familiar scam is one of the most well-known and widely-used in California, yet homeowners still fall victim to an agent or broker who suggests the arrangement.
“There was a time when we had maybe 40 notices of default a month and now we’re having 600 to 700 a month,” said Ridge Lazard, deputy district attorney for Solano County, who said foreclosure scams have ballooned in the last year. “We have more and more desperate people who become easy targets. They want to hear there’s a simple solution.”
The people who give them that simple solution are frequently con artists. Last week, arrest warrants were issued for five people involved in a federal land grant scheme where people paid $10,000 to falsely prevent foreclosure and signed over their property. More than 300 properties were affected across Southern California and more than 60 lost their homes to foreclosure. The group targeted non-English speaking, Latino homeowners.
Last month, two women were charged with multiple felony counts of filing false grant deeds with the recorders office, grand theft by false pretenses, and receiving money as a foreclosure consultant before fully performing all services, according to the Alameda County district attorney’s office.
Fourteen homeowners were told to pay a fee up front and then $1,500 to $2,500 every month to keep the house out of foreclosure and were reportedly told to fill out a grant deed that deeded a fraction of the property’s interest to various companies. Unbeknownst to the homeowners, the companies did not actually exist, the district attorney’s office contends.
“They do offer the simplest situation,” said Chris Sadlowski, an agent with the Concord resident agency of the FBI. “They tell them, ‘Don’t worry about it anymore.’”
And that is a welcome relief to worried and stressed-out homeowners, he said.
Sadlowski said that the East Bay has a huge amount of mortgage fraud and fraudsters target low-income and ethnic communities, specifically new immigrants or non-English-speaking populations that may not be aware of laws or regulations. It helps that people are naturally trusting, he said.
“In my personal opinion, they’re already in a bad situation, so they kind of cross their fingers and hope it turns out for the best,” he said. “People are working from an emotional deficit.”
Escobedo said he hopes he can buy back the house with help from his sister. He spends much of his day trying to track down others who were also victims, because “I can’t help it,” he said. “I feel burned out by this. My mind’s always thinking about this.”
Suffering from foreclosure scams
by Barbara E. Hernandez | CONTRA COSTA TIMES