Rene Alvarez and Mariano Ortega, the co-owners of M & R Contemporary Solutions, a Campbell foreclosure consulting firm, pled guilty and no contest Monday to theft and foreclosure fraud charges. The charges related to a scheme that, over a year, bilked about 400 mainly Hispanic homeowners out of close to $2 million.
A total of 10 victims were from South County: seven from Gilroy, two from Morgan Hill and one from San Martin, according to Mike Fitzsimmons, Deputy District Attorney for the real estate fraud unit.
Victims, who were in various stages of the foreclosure process, were told that M & R Contemporary Solutions would save their homes from foreclosure by facilitating the purchase of their existing lender’s loan by a third party at a discounted price. Ostensibly, the homeowners would then be offered a new reduced principal loan that would have significantly lower monthly payments. Homeowners paid from $3,000 to $10,000 each to M & R depending on how far along they were in the foreclosure process. The collection of up front fees from homeowners in foreclosure is a felony under California law regulating the conduct of foreclosure consultants. In many instances, victims paid $10,000 even though they had already lost title to their homes via foreclosure. No M & R client ever received a new loan.
“Homeowners in foreclosure should never pay advance fees for help,” said Deputy District Attorney Mike Fitzsimmons. “They should reach out to the agencies who can lend a helping hand for free.”
Sentencing for Alvarez and Ortega is scheduled for May 21 in Santa Clara County Superior Court, Department 30. They will receive a five year sentence of jail and mandatory supervision under the new California realignment law. A third defendant in the case, Cydney Sanchez, is still pending trial in the matter. Investigators have seized $257,000 from M & R’s bank accounts which may be applied toward restitution. Victims of M & R who seek information on the sentencing or restitution should contact the Santa Clara County District Attorney’s Office Real Estate Fraud Unit at (408) 792-2879.