Rodriguez faces a maximum possible sentence of 40 years in federal prison. She is scheduled for sentencing in December.
Easy access to information is one reason for the growing fraud problem, experts say. If a borrower fails to pay the mortgage, the bank files a notice of default with the county recorder's office, usually after three consecutive missed payments. Rodriguez stated in court records that she targeted people by perusing computerized database lists of homes going into foreclosure.
It may look legit
Experts say sophisticated fraud rings can include brokers, appraisers, escrow agents, loan processors and underwriters. And, they add, paper-based systems, blind chains of title, faceless transactions and straw buyers are giving such rings an advantage.
"Because modern mortgage lending is very much like an assembly plant, there are opportunities for these fraudsters to take advantage of weak links along the way," said Michael Pfeifer, an attorney with Pfeifer & Reynolds LLP in Orange County, who specializes in fraud-for-profit rings and represents lenders and brokers in civil fraud recovery cases.
The scams can range from the simple to the complex, Deputy Atty. Gen. Diehl said. In addition to the lease-buy-back schemes, bailout scammers offer loans from private investors who require upfront charges or outrageous service fees, which often push homeowners further into debt, back into foreclosure or result in complete loss of title. Other scams feature self-proclaimed experts who promise to speak with the lender for an upfront fee and then disappear. And buyout scams come packaged as low-ball offers or fake appraisals.
Equity thieves will offer people facing foreclosure a short-term loan to cover their debts or agree to refinance the loan, said Manuel Duran, an attorney with Duran & Flanagan in Los Angeles who has served as prosecutor in foreclosure scam cases.
Although the homeowners already have bad credit, they often can still refinance, he said, "but the [swindler] tells them they won't be able to."
Sometimes, Duran said, scam artists say they need signatures to take out a loan to pay foreclosure fees. In other cases, they promise to refinance the loan but draw out the process to the point that the owner has no choice but to accept help from the fraudulent investor or co-signer.
