In California, mortgage scammers find easy pickings

Maricela Castellanos sat at her desk, the telephone pressed to her ear, a chill running through her body.

A representative from her mortgage company was on the line with troubling information about the loan on Castellanos' Hesperia home.

No one at the company had previously been in contact with her, Castellanos recalled the man saying. The bank had no record of a new loan agreement with her, he said, nor had it received cashier's checks for $2,260 and $1,408.23 she said she had sent.

Castellanos had been a victim of an alleged loan modification swindle -- a financial crime in which scammers pretend to help distressed borrowers renegotiate their mortgages with their banks but instead pocket the money and leave the homeowners in worse straits than before.

Law enforcement officials say the scams are becoming increasingly prevalent, especially in California, where the Department of Real Estate has reported an explosion from 10 open cases a year ago to more than 750 this spring. Nationally, U.S. Atty. Gen. Eric Holder has said that the FBI's "rescue scam" caseload is up 400% from five years ago.

Some schemes advertise with hand-drawn signs on freeway ramps, while others target homeowners by name with carefully forged documents that appear to come from their lender.

The alleged scam artists to whom Castellanos paid more than $5,000 last fall were among the most sophisticated operating in California, authorities said, stymieing investigators with a thicket of bank accounts, 1-800 numbers and wire transfers to Mexico.

"Trying to piece it together . . . was an incredibly difficult thing to do," said Deputy Atty. Gen. Angela Rosenau.

Hours after Castellanos' conversation with her lender, an unfamiliar car paused in front of her house.

Sandy Birch, an investigator with the California Department of Justice, had arrived with a cashier's check Castellanos had sent to a post office box in the San Fernando Valley.

"I want to know why you were sending money there," Castellanos recalled Birch asking her.

Castellanos told the investigator that she and her husband had bought their three-bedroom home on Manzanita Street in 2005. Their $280,000 loan had a monthly payment of about $1,700 -- manageable on her salary as an office manager and her husband's work at a golf course. Then her husband got laid off.