(WUSA9) -- Two men pleaded guilty on Friday for their involvement in an online foreclosure rescue scam, according to U.S. Attorney Neil MacBride.
Forty-nine-year-old Mark S. Farhood, formerly of San Diego, Calif., and 37-year-old Jason S. Sant pleaded guilty to conspiracy charges in connection with the scam -- that went by several names, including Home Advocate Trustees and Walk Away Today, and used several websites, including walkawaytoday.org and sellfastusa.com -- to deceive hundreds of homeowners into surrendering their properties to the company.
MacBride wrote in a press release:
"According to court records, Farhood and Sant owned Home Advocate Trustees, which also went by the names Walk Away Today, First Equity Trustees, Home Security Consultants, Sell Fast USA, Short Sale Buyer, USA Sell House Fast, and USA Rental Housing. They marketed the businesses nationwide as purchasers of distressed real estate and a means by which vulnerable homeowners could avoid foreclosure and the accompanying negative effects on their credit. The companies told homeowners they were in the business of negotiating with lenders to purchase mortgage notes at a discount and falsely claimed to have been in business for seventeen years, to have experienced a 90% success rate in purchasing such notes, and to be the nation's largest volume buyer of short sale and over-leveraged real estate."
Sant and Farhood admitted Friday that the businesses were a fraud, no such negotiations with lenders ever took place, and the scheme was only a way to take possession of hundreds of homes at virtually no cost and then make millions of dollars by renting the homes to others.
According to MacBride, the men also admitted that they submitted fraudulent loan modification applications to mortgage lenders under the U.S. Department of the Treasury's Home Affordable Modification Program in the name of homeowners, without the homeowners' knowledge or consent. Then, they used the applications to stall foreclosures and for which no mortgage payments were being made and to maximize the time period during which they could collect rental income. "The homes purportedly sold to Home Advocate Trustees and its related entities ended in foreclosure, harming the participating homeowners and commonly resulting in eviction of the tenants," according to MacBride.
MacBride says Farhood and Sant each face a maximum penalty of 30 years in prison when they are sentenced on August 2 and August 9, respectively.