The Meadows Real Estate News

San Diego’s own on-line newspaper, www.voiceofsandiego.com , has broken still another real estate scam, and this time Escondido was in the scam.

 

Jim McConville, an aging con man from San Francisco (with a criminal record) “rented” people’s “identities” for use of their credit.

 

He would meet with a few upper-class matrons in some up-scale neighborhood and ask them for their identity to purchase a condo, because, he said, he wanted to own more properties than the law allowed.

 

He offered to pay participants $10,000 just to use their good credit. Although their name would be on the mortgage, he promised to pay the mortgages.

                    

Using forged documents, and compliant lenders and real estate people, he ended up owning 81 condos in Escondido and San Marcos – but he bought them with the help of scam appraisers for about twice what was their actual value.

 

That put about $120,000 in Jim McConville’s pocket each time, and he collected a few months rent, never paid the “investors” their $10,000 – nor did he ever pay the mortgage payments on the condos.

 

That leaves the “investors” with mortgages much higher than the actual value of the condo, rents far too low to meet the mortgage…many are defaulting, harming not just the credit of “investors” but the mortgage holders who were defrauded by fake documents…

 

Those 81 units have not even come on the foreclosure market, but they will arrive in bunches, further harming the market, and leaving still more toxic loans for the government to solve.

 

Scammers always hurt the “investor” but this time they also harm the bank, the banking system, and eventually the taxpayers!

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The real estate scams continue to surface.

 

In Los Angeles, the City Attorney explained the latest California scam, thusly:

Beginning as early as April 2006, the defendants, acting as representatives of Norwalk-based Century 21 Allstars, Inc, deceived and induced five first-time home buyers to apply for and obtain mortgage loans under a fictitious government program that would supposedly pay the difference between what the victims said they could afford, and the actual monthly mortgage.

The defendants targeted low-income, Spanish-speaking victims by flooding Spanish language radio with ads voiced by Isabel Gutierrez that touted the non-existent government program.

The Orange County Register described the methodology:

(Quote)The Gutierrez’s assured the victims that the government would assist them in paying the difference between what they could afford, and what their monthly mortgage payments would be. Relying on the promise of free financial assistance, the victims agreed to purchase homes that ranged in price from $409,000- $470,000.

The victims were also told that in order to qualify for the program, they needed to purchase a house from a set of five that were shown to them by Tony Gutierrez.

The defendants chose dilapidated homes they couldn’t sell, in lower-income neighborhoods, and then presented them to the victims as the only homes eligible under the government assistance program. By representing both the buyers and the sellers, they were able keep the truth from either party, all while driving up the sales price – increasing their commissions and broker fees.

The defendants promised to sweeten the deal by offering the services of Tony Gutierrez – who is also a contractor – who would perform necessary repairs to the dilapidated houses by folding the cost of the repairs into the new home loans.

Once a victim agreed to purchase a home, the defendants falsified and forged loan applications by overstating the victim’s income, without the victim’s knowledge, in order to guarantee approval of the loan. These falsified closing documents were drafted in English, while the victims spoke and read only Spanish.

(Unquote)

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