Makarov asked what I thought about the latest fraud bust in Carlsbad detailed below.
1. I’m glad to see realtors and mortgage brokers going to jail – they deserve it. Hopefully it will also prevent others from committing crimes in the future.
2. These people were greedy. They could have sent these buyers to Countrywide who was funding home purchases with 10% down payments, 700+ FICOs, and no questions asked. But instead, these realtors had to make commissions on the loans too, so they dummied up documents to send to alternative lenders – and now they are going to jail. Was the 1-2% extra they made in loan commissions worth it?
3. This story is an example of the widespread abuse during the peak era – Spanish-speaking agents taking advantage of Spanish-speaking clients. Zach Fox at the North County Times investigated it here:
From the UT – check the link at bottom for details on other big fraud cases:
A Carlsbad real estate agent and her attorney son have been convicted in an $8 million mortgage scam that zeroed in on Spanish-speaking borrowers who obtained homes they were not qualified to obtain, authorities said.
Aida Agusti Castro, 67, and her son, Stephen Kenneth Chrysler, 46, will be in federal custody until their scheduled sentencing on July 30.
Chrysler, of Orange County, had licenses to practice law and real estate in California and owned Carlsbad-based SKC Real Estate. Castro, his mother, who also was licensed to practice real estate in the state, was an agent at that company.
Records show that the pair created 30 fake mortgage applications and other documents to get more than $8 million in home loans for Spanish-speaking home buyers who were unqualified for mortgages. Authorities said the mother-and-son duo inflated borrowers’ incomes and bank-account balances, among other things.
Those who were victimized said Castro and Chrysler failed to translate the mortgage documents and told them to sign on the dotted line without disclosing their deceptive tactics, authorities said. Many of the borrowers in the case received notices of default and eventually faced foreclosure.
The scam has been linked to 16 homes in different parts of the county, from San Marcos to Lakeside, court documents show.
Charges brought upon Castro and Chrysler were part of a larger probe in which defendants in San Diego and the Bay Area were accused of generating fraudulent loans estimated at $55 million, authorities said.