Ex-Subprime Mortgage Peddlers Now Running Loan Modification Scams
- In early 2008, Cheryl Ann Montero, a California mortgage broker, held a series of free seminars [for homeowners facing foreclosure] in the clubhouse of the Lone Tree Golf Course in Contra Costa County, a suburban area near San Francisco. [...] She said her firm, Freedom Financial
Solutions, could pressure lenders to stop foreclosures by challenging the legality of loan agreements, according to court records. Her fee: $2,500 upfront and a $2,000 monthly payment to cover legal costs. Promoting her services on the Web site Craigslist, Montero, a blond-haired, blue-eyed woman who looked like a soccer mom, became known as a foreclosure escape artist.
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- She was also ripping people off, says Ken McCormick, a prosecutor in the Contra Costa County District Attorney’s office. A player in a new confidence game exploiting soaring defaults, Montero didn’t have a team of attorneys to confront lenders. Instead, her firm took a small ownership stake in some of her clients’ houses and filed for bankruptcy, temporarily suspending foreclosure proceedings on those homes, according to an investigative report filed in court by prosecutors.
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- “She couldn’t make it in real estate anymore, so she just changed hats,” McCormick says. “But she was taking money and doing nothing.” The prosecutor charged Montero with 36 counts of grand theft and related charges in December. She pleaded not guilty and is free on $100,000
bail.(1)
For the entire story, see Subprime Swindlers Reconnect to Homeowners in Foreclosure Scams.
(1) According to the story, Montero ran a three-person operation in which she told homeowners that she could find technical violations committed by lenders in loan contracts, an investigative report filed in court says. Montero blundered during one of her seminars by dropping the name of an attorney who she claimed was working with her, the report says. One of Montero’s clients called the lawyer, who had never heard of Montero, and he in turn complained to the authorities. “That’s what gave us a heads up,” says McCormick, the prosecutor.
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