Combined Church-Immigrant Based Affinity Fraud Possible In Alleged Bay Area Mortgage Scam

The Wall Street Journal recently ran a story about Naira Costa, a church-going Brazilian immigrant who belonged to an evangelical church that is a spiritual and social haven for Brazilians in the San Francisco, California Bay Area, and her and others' experiences with the church's head deacon, Soario Santos, and other church officers in connection with the purchase of area homes. According to the story:

• Mr. Santos, a fellow Brazilian, served the Pentecostal church on nights and weekends. During the day, he worked as a loan officer at a mortgage brokerage owned by a Brazilian immigrant. Mr. Santos and other church officers also working at the same real-estate business routinely approached churchgoers to encourage them to buy homes.

• Weak credit and low wages weren't barriers, Ms. Costa recalls. "He told us that a house easily would appreciate $100,000 in a year," enabling the owner to refinance, says Ms. Costa. "We trusted him implicitly. Everyone at the church was buying houses from him."

• Today, Ms. Costa and other former Message of Peace parishioners claim that Mr. Santos was a key part of a mostly Brazilian ring that allegedly conspired to defraud people by persuading them to buy homes they couldn't afford. Ms. Costa, the housekeeper, secured a $713,000 sub-prime mortgage. In another instance, a Brazilian baby sitter borrowed $495,000. Now, the home buyers are beset by foreclosures and additional stains on their already-tainted credit.

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• A lawsuit filed by Ms. Costa and several others in California superior court alleges that a network of real-estate agents, loan officers and mortgage brokers targeted "vulnerable immigrants," falsified financial records, forged documents and misled the home buyers about the real costs of their mortgages. The suit seeks unspecified damages for the plaintiffs.

For more, see How the Subprime Mess Hit Poor Immigrant Groups (may require subscription; if no subscription, go here).