By Khalida Sarwari
A San Jose man was arrested Thursday on fraud charges following an investigation by the Santa Clara County District Attorney’s Office.
Rene Alvarez, 39, was arrested for participating in a wide-ranging loan modification scam in which he allegedly defrauded hundreds of homeowners whose homes were in foreclosure, according to the district attorney’s office.
Authorities have issued an arrest warrant on the same charges for Mariano Ortega, 34, of San Jose, who along with Alvarez owned and operated M & R Contemporary Solutions Inc., a foreclosure-consulting firm in Campbell.
The investigation revealed that the firm had recruited nearly 500 mainly Hispanic homeowners throughout the state by pitching a program in which homeowners were told that the firm would save their residences from foreclosure by facilitating the purchase of their existing lender’s loan by a third party at a discounted price.
A new reduced principal loan was then offered to the homeowners to significantly lower their monthly payments.
Ortega and Alvarez allegedly collected more than $2 million in advance fee payments from homeowners in their “principal reduction” program since mid-2008, but ex-employees claim no homeowners were ever assisted in this way.
Anyone who may have information regarding the whereabouts of Ortega or about the incident in general is asked to contact District Attorney Investigator Bob Traskowski at (408) 792-2938 or e-mail him at btraskowski@da.sccgov.org.