California attorney general Kamala Harris arrested three officers last week who were allegedly operating an illegal foreclosure rescue company.
Magdalena Salas, Angelina Mireles and Julissa Garcia were arrested on 13 felony and two misdemeanor counts, including conspiracy, grand theft and false advertising.
Salas, the owner of Stockton, Calif.-based Legacy Home Loans, along with her twin sister Mireles and Garcia allegedly took up to $5,000 in upfront loan modification fees from several distressed homeowners living in the state's Central Valley.
According to the complaint filed against the three individuals, the company supposedly made false guarantees to the homeowners who participated in this scam to lower their mortgage payments.
Federal law prohibits any foreclosure consultants from collecting money before any services are performed.
“These scam artists preyed on innocent homeowners who were simply trying to protect their homes and families from foreclosure,” Harris said. “The mortgage crisis has caused tremendous damage to our state and to California families. There is nothing worse than those who seek to capitalize on this devastation by defrauding Californians who have already been victimized in this crisis.”
Harris said the scam took place from November 2009 to August 2011. The defendants, along with company employees, circulated flyers throughout the region in both English and Spanish that read, “We will save your home! Guaranteed!” and “Guaranteed new lower mortgage payments!”
Along with the flyers, Legacy Home Loans ran television and radio advertisements in both languages and promoted its services on a billboard.
Clients of this illegal scam and its related businesses, including Salas Properties, Salas Estates, Peace and Legal Services and Divinity Legal Services, were promised a full refund if they did not obtain a loan modification. Without receiving their loan modification, many of the clients ended up losing their home.
“This operation was nothing more than a scam,” said Christy Romero, deputy special inspector general for SIGTARP. “Salas, Mireles and Garcia lined their pockets with upfront fees while making false promises to homeowners of lowering their mortgage payments through the ‘Obama Plan.' They deceived struggling homeowners and exploited TARP's efforts to help those in need.”
