Three California Agents Arrested for Scamming Distressed Homeowners

Agents have a major role to play in getting the real estate market back on track. That’s why it’s particularly upsetting when agents attempt to swindle homeowners rather than serve them.

Three top officers of a Stockton, Calif.-based real estate company were arrested this past Friday for allegedly bilking struggling homeowners for thousands of dollars in up-front loan modification fees.

The state attorney general’s office says Magdalena Salas, 42, Angelina Mireles, 42, and Julissa Garcia, 36 -of Stockton advertised they would lower mortgage payments for homeowners or give refunds if unsuccessful, for a fee of $5,000. However, in almost all the cases, the homeowners received nothing, and some even ended up losing their homes.

From November 2009 to August 2011, the agents circulated flyers throughout Stockton that read, in both English and Spanish: “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 English and Spanish and broadcast its services on a billboard.

The agents are being held in the San Joaquin County Jail facing felony and misdemeanor counts, for conspiracy, grand theft and false advertising to the public.

“The mortgage crisis has caused tremendous damage to our state and to California families,” said California Attorney General Kamala D. Harris. “There is nothing worse than those who seek to capitalize on this devastation by defrauding Californians who have already been victimized in this crisis.”

Foreclosure consultants are prohibited by law from collecting money before services are performed. It’s terrible when agents besmirch the good name of the profession in the hopes of making a quick buck off unsuspecting homeowners.

Have you seen similar cases in your area? Do you think more can be done to discourage this kind of criminal behavior? RE-Insider would love to know your thoughts.