Boris Buzan/California WatchLydia Prado makes her living cleaning homes, but when she needed financial help with her own home, she became entangled with a loan modification scam.
Lydia Prado has cleaned my parents’ Mission Viejo house every other week since I was about 8 years old. In August, Lydia confided to my mother that she’d given money to a man who’d promised to help save her small Santa Ana home from foreclosure.
Lydia heard the man’s ad on a popular Spanish-language radio station and called his number. For $1,500, he could lower her mortgage payments. He called himself Jorge; his card just said “George.” He wouldn’t give a last name. He insisted on getting paid up front.
Despite the warning signs, Lydia was desperate. She paid George $450, telling him that was all she had. She was going to pay the rest and send George all the personal financial information he’d requested. My mother called me, worried. Lydia, she knew, had been scammed before.
I offered to look into it.
Lydia works so hard and never seems to get ahead. Most of the time, I feel helpless in the face of Lydia’s never-ending travails. But as an investigative reporter, I do know how to track down people.
It’s illegal to charge up-front fees for help with loan modifications. California outlawed such fees last year as part of a crackdown on the scams that mushroomed in the wake of the economic crisis. Attorney General Jerry Brown has brought civil and criminal actions against 100 loan modification consultants, while federal agencies and officials in other states have acted against hundreds more.
But scam artists continue to flourish nationwide by changing their names and tactics. The Lawyers' Committee for Civil Rights Under Law, which runs a website devoted to mortgage scams, gets reports of about 700 alleged victims every month. More than 20 percent of the complaints come from California, by far more than any other state.
To say the least, I was wading into a nasty swamp. In my search for George, I found he had left a trail of business names, legal problems and angry customers. But he hadn’t been caught. Officials at the attorney general’s office told me they didn’t know anything about him. Despite the crackdown, George was still out there.
I started my search by Googling the information George had given to Lydia. His Yahoo and Hotmail e-mail addresses yielded nothing. But his cell phone led to the website of the Latino Professional Network, where a George Bolanos had applied for membership. He supposedly had a degree from the University of Southern California. George’s toll-free business phone led to two websites advertising forensic loan audits. I had read on the attorney general’s website that such audits were the latest variation on the scam. One of the sites, Rescasa.net, was registered to George Bolanos. I was on to him.
A screenshot of Rescasa.net before the site was taken down.
The business name George was using, California Homes, was registered with the Los Angeles County clerk under the name J.R.B. Santizo. Eventually, I figured out that George likes to use variations of his full name: Jorge Rolando Bolanos Santizo. There were many clues. When George came to Lydia’s house, her son was so suspicious that he snapped a cell phone photo of the license plate on George’s car. I checked it with the Department of Motor Vehicles, which confirmed the 1998 Lexus belongs to Jorge Bolanos Santizo.
I called Lydia to ask more about George. She told me she once called his assistant and asked for his last name. The assistant didn’t answer. Soon afterward, George called back and yelled at Lydia for meddling, she says. I asked why she didn’t go to a free-of-charge, government-certified housing counselor, which is the unanimous advice of consumer advocates. She said she had tried, but couldn’t get anyone to respond fast enough.
“When you’re in need and you’re desperate, you look for help where you can,” she said to me in Spanish. “I don’t want to go on the street – where am I going to go?”
Loan modification troubles not new
Lydia is 58 and cleans the houses of 18 different families. They pay her between $75 and $130 per visit. For a while, when the economic downturn hit, she lost some work and struggled to pay the bills. Now business is better. By the end of each week, she’s exhausted. Lydia emigrated from Mexico in 1972 and is a U.S. citizen now. She lives in a predominantly Latino neighborhood in a 1920s, Spanish-style two-bedroom house she bought about six years ago. She says five people have been killed nearby and she's afraid to go out at night. Two of her sons live in the house with her, along with a dog she adopted from the street and a cat from a shelter. She says the old house “isn’t pretty,” but it’s “the American dream.” She's planted roses all around it.
Lydia also told me that she felt she had been cheated before. Last fall, she gave $2,500 to a Paramount company called America Associates Realty, to help her get a loan modification. They helped her fill out an application to lower her mortgage payments for a three-month trial period, in the hope that the bank would agree to a permanently lower rate. Such trials are part of a free Obama administration program. Then America Associates told Lydia that it had concluded its services. She felt burned.
“Do you know how much I have to work cleaning houses for this money? This isn’t right,” she told me.
I found that in August the Department of Real Estate filed a complaint accusing America Associates of fraud, refusing to refund money to a slew of unhappy customers.
I called one of the owners, Roberto Romero. He said most of the complaints were unfounded and had been resolved. At first, he insisted his company successfully got Lydia a loan modification, but he eventually acknowledged it was only a trial-period application. He said that’s all Lydia’s $2,500 paid for.
Jason Menke, spokesman for Wells Fargo Home Mortgage, the servicer for Lydia’s mortgage, told me the bank offered the trial based on a phone conversation with Lydia. It’s unclear what, if anything, America Associates did to help. Menke said he couldn’t get into details, but Wells Fargo is still reviewing Lydia’s financial situation to determine whether it will offer a modification.
Trail of legal, tax problems
Lydia went from putting her hope in America Associates to panicking – and to putting her trust in George. George had reassured her that he was legitimate, pointing out that he had been on the radio a long time. I started listening to the station on which she heard him, Univision’s KLVE, to see if I could catch his ad.
I checked to see if George Bolanos was registered with the Department of Real Estate or the attorney general’s office, as required by law for his kind of business. He wasn’t. Part of the challenge to law enforcement is that small operations are easy to start and hard to find, said Becca MacLaren, spokeswoman with attorney general’s office.
Even the bigger ones “can move quickly, change the names of their business … and be gone before law enforcement knows of their existence,” she said.
Bolanos’ company, California Homes, had an F rating from the Better Business Bureau for unresolved complaints. Gary Almond, a Better Business Bureau representative, told me that Southern California, with its high foreclosure rates and telemarketing boiler rooms, is the “hot spot of all of this.” Because of my inquiry, he posted online summaries of the California Homes complaints. Four people claimed the company took their money up front and failed to deliver.
I checked Bolanos in the public records database run by LexisNexis. It popped up with a lot of leads. I requested records from the Los Angeles County recorder, which showed tax liens against Bolanos for $131,800 in unpaid federal taxes and $7,600 in state taxes. That made for some irony when I heard back from USC, confirming that he got a bachelor’s degree in 1975 in public administration.
Last year, the state filed a judgment against Bolanos for receiving excess unemployment benefits due to fraud or misrepresentation.
I found a series of legal and tax problems – including a personal bankruptcy filing – going back to the 1990s. And I found more business names. In 1995, he set up a company called Good Credit Co. In 2008, he incorporated a nonprofit organization called Grupo Confi-Casa to provide “affordable housing” to low-income Latino families. It advertised loan modifications.
Tracking down ‘Mr. George’
I figured it was time to call “Mr. George,” as one online complaint refers to him.
When I called his cell phone, the person who answered said it was no longer Bolanos’ phone, but rather Centro Legal, a company that helps consumers understand contracts. I called one of his toll-free numbers and left a message with his assistant. A day later, the line was disconnected. I eventually sent notes to four of his e-mail addresses, outlining everything I had found and asking for comment. I didn’t hear back.
But there was more to learn. I called Ruben Guerra, chairman of the prominent Latin Business Association based in Los Angeles. Bolanos had been elected to the board in 2008. But Guerra told me that he forced Bolanos to resign later that year after getting complaints about his loan modification business.
“He seems like a pretty stand-up guy until you start hearing stories,” Guerra said.
I called Glenda Herrera, who filed a small-claims suit against California Homes in February. Her daughter, Karla Contreras, told me they gave Bolanos $1,500 for help with a loan modification. Her mother found out his last name from one of his secretaries. When they went to his office, they discovered he’d rented office space in a downtown LA skyscraper. It seemed professional.
Bolanos instructed them to stop making mortgage payments altogether, Contreras says. They started getting foreclosure warnings. When they called the bank to check on Bolanos’ progress, the bank said he’d never been in touch. Her mother called Bolanos, Contreras says. He was rude and hung up. They sued for the $1,500 and got a default judgment because Bolanos didn’t show up.
“We took his word,” Contreras told me. “I really hope he pays for what he’s been doing.”
In another recent lawsuit, a woman facing foreclosure accused Bolanos and another man, Antonio Ibarra, of charging her $1,250 for a loan modification and not following through. She filed the lawsuit without a lawyer. In one part, it reads: “I save so so much to buy my house and have a house I could call my own and sleep in it. Now they are going to take my house away.”
Bolanos filed a response denying any fraud and noting that the money was refunded two days after she filed suit. The case was dismissed when the woman failed to show up in court.
I contacted Ibarra, the co-defendant, who told me that Bolanos rented office space from his firm, Professional Realtors, for a few months in 2009. He said Bolanos couldn’t drive due to an injury, so Ibarra drove him to house calls as a favor. Ibarra denies having anything to with Bolanos’ business. I asked him if he knew Bolanos was illegally charging advance fees.
“Probably he was, yeah,” Ibarra said.
On the airwaves
Every now and then, I checked back with Lydia. She told me she couldn’t stop clenching her teeth because of all her stress about her house. “How can someone do this to a person, steal money from a person who works so much?” she said. “They don’t have a conscience. They don’t fear God.”
She said that on her way to church one Sunday morning, she’d heard Bolanos on the radio again. The next Sunday, I tuned into to KLVE.
I was expecting an ad, but instead found myself listening to a half-hour infomercial. Bolanos gives a conversational monologue in Spanish, addressing the audience as “ladies and gentlemen” and plugging his same toll-free number but with a new name: Centro Internacional Legal, or International Law Center.
A spokeswoman for Univision, the media giant that owns the station, said the company hadn’t received complaints and couldn’t further discuss its clients.
On the infomercial, Bolanos offered a $200 discount for his loan modification services if you mention the radio promotion. He said he knows that some listeners have had bad experiences with scams in the past. But he says not to act like a victim. “Don’t focus on the past,” he says. “Focus on the present.”