Tuesday, Nov. 27, 2007 | In one of the first local cases in a national crackdown on mortgage and real estate fraud, four people connected with a San Marcos realty office have pleaded guilty to charges that they went to great and illegal lengths to secure mortgages for financially unqualified consumers, thereby pocketing more than $1 million in fraudulent commissions.
In some transactions in the scam, the defendants used straw buyers — consumers with higher credit scores and bank reserves — to secure financing for other customers, fraudulently claiming those third parties would occupy the homes, according to prosecutors.
For others, the team altered financial information on loan documents to meet the lenders’ requirements, or created false employment information and posed as those employers when lenders called to verify. They submitted loan applications with inflated bank account balances falsely substantiated with fictitious bank statements.
They purchased and submitted to lenders letters from tax preparers that misrepresented consumers as business owners, deposited their own money into clients’ bank accounts to falsify certificates of deposit, and fraudulently sent lenders copies of social security cards altered to hide work restriction language, according to court documents.
Alejandro and Emilio Lopez, two owners of Century 21 Eldorado in San Marcos, headed the “Lopez Team” of loan officers, loan processors and real estate agents. Ravinderjit Singh Sekhon was a loan officer there and Linda Velasquez was the office manager, acting as translator for Sekhon with Spanish-speaking clients. All four pleaded guilty earlier this month to charges related to the scheme.
Obtaining financing from subprime lenders using so-called stated income or “no-doc” loans, the group fudged employment, rental, bank and even citizenship status information for more than 200 unqualified clients, brokering first and second mortgages for an average of $400,000 each, according to court documents.