DA's Office Charges One, Seeks Another In Alleged "Principal Reduction" Foreclosure Rescue Scam; Suspects Believed To Have Illegally Pocketed $2M+

From the Office of the Santa Clara, California District Attorney:

• 39-year old Rene Alvarez of San Jose was arrested yesterday by investigators with the Santa Clara County District Attorney’s Office on charges that he defrauded hundreds of homeowners, whose homes were in foreclosure, in a wide-ranging loan modification scam. There is an outstanding arrest warrant on the same charges for his cohort, 34-year old Mariano Ortega of San Jose.

• Since mid-2008, Alvarez and Ortega have owned and operated M & R Contemporary Solutions, Inc. a Campbell foreclosure consulting firm. M & R recruited approximately 500 mainly Hispanic homeowners throughout California by pitching a “principal reduction” program. Homeowners were told that M & R would save their residences from foreclosure by facilitating the purchase of their existing lender’s loan by a third party at a discounted price. The homeowners were then to be offered a new reduced principal loan that would have significantly lower monthly payments.

• According to numerous ex-employees of M & R, no homeowners were ever helped in this manner. M & R collected thousands of dollars in up front fees from each homeowner, which is a felony under California law regulating the conduct of foreclosure consultants. It is believed that M & R has illegally collected over $2 million in advance fee payments from homeowners.

For the DA's press release, see Co-Owner of Campbell Foreclosure Consulting Firm Arrested for Defrauding Hundreds of Homeowners. loan modification