By Khalida Sarwari
Four years ago, Rene Alvarez and Mariano Ortega made millions by running a dishonest scheme out of their Campbell office to swindle homeowners out of their money.
The co-owners of foreclosure consulting firm M & R Contemporary Solutions generated nearly $2 million by telling their clients what they wanted to hear.
They would tell the ones facing foreclosure that they would save their home by facilitating the purchase of their existing lender’s loan by a third party at a discounted price. The clients were promised a new reduced principal loan that would have significantly lowered their monthly payments. No client, however, ever received a new loan.
“Their motive was to make money,” said Mike Fitzsimmons, a prosecutor at the Santa Clara County district attorney’s office. “They weren’t really out to help people, they were more out to help themselves.”
Victims of Alvarez, 41, and Ortega, 37, ranged from homeowners who received letters from banks but hadn’t formally gone into foreclosure to homeowners who had lost the title to their homes. The two men collected up to $10,000 from each of their clients in upfront fees, an act that is illegal under California law.
In the end, their scheme affected about 400 homeowners–95 percent of whom were Hispanic–all over the country, from Campbell and other cities in California to cities in Florida and Hawaii.
“There are two parallel themes of wrongdoing,” said Fitzsimmons. “Accepting advance fees, and second, for the post-trustee sale group, they were promising to get them new loans. That’s an essential impossibility because the loans were canceled and the houses had already been sold.”
After a successful first year in business, M & R Contemporary Solutions began crumbling in August 2009 when former employees, including Rock Disessa, a third co-owner, went to authorities after learning that Alvarez and Ortega were accepting advance fees, said Fitzsimmons.
Ortega and Alvarez were arrested in September 2009 and charged with 83 counts, including conspiracy.
Earlier this month, Alvarez pleaded guilty and Ortega pleaded no contest to seven of those charges, including grand theft and foreclosure fraud. For the crimes, they face a maximum punishment of three years with a two-year probationary period under the new California realignment law.
A third person was later arrested as well, said Fitzsimmons. Cydney Sanchez, who had her own business in Beverly Hills, deceived Ortega and Alvarez into thinking that she had a pool of investors who would be willing to provide new loans at reduced principal and interest rates. She has pleaded not guilty to grand theft and foreclosure fraud charges and is awaiting trial.
At the time of Ortega and Alvarez’s arrests, Fitzsimmons said authorities seized about $250,000 from their bank accounts, which will be used to repay some of the victims.
“We’re hoping that the judge orders full restitution for all of the victims,” he said.
Alvarez and Ortega are scheduled for sentencing on May 21 at Santa Clara County Superior Court in San Jose.
Fitzsimmons advised homeowners to be aware of state laws regulating the conduct of foreclosure consultants.
“They should expect and demand that the work be done before they pay any fees,” he said.
Anyone who may have been a victim of M & R and is seeking information about the sentencing or restitution should call the real estate fraud unit of the district attorney’s office at 408.792.2879.
Troubled homeowners are victims of dishonest scheme in Campbell
