Santa Clara DA Obtains Indictment In Alleged Foreclosure Rescue, Refinance Scam

In Santa Clara County, California, the Silicon Valley / San Jose Business Journal reports:

• In one of the first criminal cases in the Silicon Valley stemming from the subprime scandal, the [Santa Clara] district attorney obtained indictments against a Realtor and a broker with the now-defunct Su Casa/Century 21 office [...] . Charged are Realtor Alberto Parra and mortgage broker Oscar Nuñez, who set up [an] alleged scam that snared [homeowner Boris] Michel and his family, according to the indictment in Santa Clara County Superior Court. Parra and Nuñez have pleaded not guilty.

***

• Prosecutors call the Su Casa case a co-signer scam. According to the district attorney, [... t]rouble began [...] when [Michel] lost his warehouse job at Lifescan, when the company transferred positions to Japan. His mother and sister also worked there and lost their jobs. Parra had also worked at Lifescan, but left before the layoffs to become a real estate broker. Michel's mother contacted him. According to court documents, Parra arranged a $16,000 short-term loan to Michel and then, later, a refinance.

• But this was not your usual refinance. Since Michel had missed some payments, he was no longer credit worthy. [Assistant district attorney Stephen] Gibbons says Parra arranged for a co-signer. Michel claims that he was not aware that the deed of trust would be in the name of the co-signer, and that he could lose his home. Nuñez was the mortgage broker on the deal. The grant deed Michel signed was a blank document, investigators say. The name entered on the deed was not Michel but [a straw buyer], who was paid $3,500 for the use of his name, the case file says.

• In April 2004, the Michels received a good clue that something was wrong: the loan servicing statement they received was addressed to [the straw buyer]. According to the investigation report, Parra told the Michels not to worry about that, but to just make the payments. On July 21, 2004, they were served with a notice of eviction.

For the story, see Santa Clara district attorney targets subprime loan scandal.