Mortgage Swindlers Still At it:"Bleed Their Victims"

Just great, more mortgage swindlers out there. When I drive around I see sketchy store fronts exclaiming this or that in regards to mortgages, how many are one hit scam artists who move in, set up the mortgage, collect the fees and then vanish? How many will take advantage of Obama's new plan?

March 27 (Bloomberg) -- In early 2008, Cheryl Ann Montero, a California mortgage broker, held a series of free seminars in the clubhouse of the Lone Tree Golf Course in Contra Costa County, a suburban area near San Francisco. The attendees, homeowners facing foreclosure, were desperate for a rescue from their woes. Using a PowerPoint presentation, Montero delivered one.

She said her firm, Freedom Financial Solutions, could pressure lenders to stop foreclosures by challenging the legality of loan agreements, according to court records. Her fee: $2,500 upfront and a $2,000 monthly payment to cover legal costs. Promoting her services on the Web site Craigslist, Montero, a blond-haired, blue-eyed woman who looked like a soccer mom, became known as a foreclosure escape artist.

“All the real estate agents knew about her classes,” says Kay Trail, a realtor in Antioch. “She was one shrewd sister.”

She was also ripping people off, says Ken McCormick, a prosecutor in the Contra Costa County District Attorney’s office. A player in a new confidence game exploiting soaring defaults, Montero didn’t have a team of attorneys to confront lenders. Instead, her firm took a small ownership stake in some of her clients’ houses and filed for bankruptcy, temporarily suspending foreclosure proceedings on those homes, according to an investigative report filed in court by prosecutors.

In the end, she didn’t deliver lower mortgages for the 10 homeowners who paid a total of$52,000 for her services, McCormick says. Montero did have mounting financial woes of her own: In September, she filed for personal bankruptcy, according to court records.

Bleed Their Victims

“She couldn’t make it in real estate anymore, so she just changed hats,” McCormick says. “But she was taking money and doing nothing.”

The prosecutor charged Montero with 36 counts of grand theft and related charges in December. She pleaded not guilty and is free on $100,000 bail. Her lawyer, Cameron Bowman of San Jose, didn’t return telephone calls for comment.

The media likes to throw trillion dollar numbers around, but on the ground their is always a swindler waiting to exploit the situation.