How To Avoid Mortgage Fraud

There are people out there waiting to take advantage of you. How can you avoid getting trapped and detect the sure signs of a bad deal? Consumer Alert takes a look at mortgage fraud.

Jonathan Mendoza owned and operated a mortgage company called MC Financial.

"Mr. Mendoza was a consummate con artist – he could convince people to do anything for him," said US Postal Inspector, Jeremy Leder. "He probably opened with the intention of being legitimate to provide people with home loans back in the heyday of mortgages when banks were willing to lend to almost anybody."

"He frequently took advantage of Hispanic families that didn't speak English," said Leder.

At some point, Mendoza took a different path and began targeting vulnerable applicants.

Leder added, "Buying the house under their name and submitting fraudulent documents to the banks in order to inflate the sale price of the home."

Essentially banks would pay Mendoza more than the actual sale price for the home and he would pocket the extra money.

"The victims in this case didn't know what kind of deal they were going into and they were stuck with this house under their name," said Leder. "The banks would go after them for foreclosure and basically ruin their credit, almost for the rest of their lives."

More than 50 mortgages and $3 million dollars in losses were involved in this scheme.

"He would advertise on the radio that he could help people with mortgages and he would find these families that needed money but didn't understand the mortgage process," said Leder.

If victims tried to question Mendoza on his numbers or paperwork, Leder said he would threaten them with violence or turning them in for deportation purposes.

Leder said, "If a loan officer, or a friend, an associate come to you and say they want to use your name on a mortgage loan, it's bad deal – don't do it – in fact its mortgage fraud – it's illegal."

Jonathan Mendoza along with three co-conspirators were convicted in this case. They faced conspiracy, bank fraud, wire fraud and mail fraud charges and were sentenced to 4 years in prison.


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