Thread: Corrupt Mortgage Lenders in the Spotlight

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7NEWS Investigates Mortgage Loans Issued To Illegal Immigrants
Justin Goodman's Family Says He Would Be Alive If Not For Loans

POSTED: 7:38 pm MST November 28, 2006
UPDATED: 11:50 am MST November 29, 2006

DENVER -- Colorado's housing foreclosures are nearing a record, driving down prices and damaging neighborhoods and one reason is mortgage fraud.

A hit-and-run death has led 7NEWS investigator John Ferrugia on a trail to what may be a ring involved in setting up illegal immigrants with fraudulent mortgages.

Daniel Martinez-Ruiz is an illegal immigrant charged this month with using phony documents to purchase property. His wife Conception Hernandez is charged with similar crimes and is out on bail.

7NEWS Investigators first learned about them and the questionable loans after they began investigating the death of Justin Goodman, who was killed in 2004 by a hit-and-run driver at 88th Avenue and Colorado Boulevard.

The man who killed him and who is now serving time in prison is Roberto Martinez-Ruiz, another member of the same immigrant family.

So, how could he and his family get mortgages to buy homes?

"There's lenders out there that will do a completely fraudulent loan to get them a house so that they can stay here," said John Vizzi.

Vizzi is in the real estate and mortgage lending business and he is the uncle of Goodman.

7NEWS' investigation has found that the immigrant family used phony documents, and in apparent collusion with realtors and lenders, received fraudulent loans to buy two homes in Thornton which were backed by F.H.A. loans.

"My nephew would definitely have been alive today if they hadn't made those loans," said Vizzi.

The immigrant family applied for a loan to buy a house on East 77th Avenue in Thornton. Records show that Martinez-Ruiz and Hernandez made the application.

But 7NEWS investigators have learned Martinez used a phony name on a fraudulent alien card because he had no credit and documents show that Hernandez used a fraudulent Colorado driver's license.

"John, the reason this case got brought to our attention is because of you and the family of the hit-and-run case," Adams County district attorney Don Quick told John Ferrugia.

Quick has now charged three members of the family and a realtor with several felonies.

"In this case, the buyers themselves are charged as being part of the scheme," said Quick.

7NEWS has learned that part of the scheme also involves phony W-2 forms and pay stubs from a Colorado cleaning service.

Golden Eagle Cleaning was set up by Daniel Martinez, again with fraudulent documents, as income verification to obtain the loan, Ferrugia said.

But Hernandez claims it wasn't the family who produced the fraudulent financial documents, but the realtor and lender.

The lender's name is William Romano.

7NEWS investigators learned it is Romano whose name appears on the loan application and who accepted the fraudulent documents.

But was it Romano who actually produced the phony W-2s and check stubs?

When approached by 7NEWS investigators, Romano said he didn't know anything and he was clearly not anxious to discuss his work. Romano said he did not make loans to illegal immigrants.

"The lender's responsibility at the end of the day is to make sure the underlying documents are sufficient and accurate," said Quick.

Because of 7NEWS' investigation, Quick is now investigating Romano and the realtors he has dealt with.

"In this case, we know a number of people who were involved in those documents. We're still pending the investigation to determine if it's a broader net than that," said Quick.

Vizzi said this case is about a lot more than just questionable loans.

"That to me is part of the reason why Justin Goodman today is dead," said Vizzi.

Romano is only under investigation. He has not been charged with a crime, although the real estate agent who dealt with the illegal immigrants has been charged.

The point is how mortgage involving illegal immigrants works, Ferrugia said. It is clear that everyone in the chain of illegal activity gets paid and there's no law that makes anyone in the chain -- the realtor, the lenders, the FHA, directly responsible for insuring documents used in the transaction are legitimate.

In this case, foreclosures on these houses cost taxpayers a total of about $140,000 because the FHA protected the lenders.

This is only one of thousands of such cases costing taxpayers millions in the state of Colorado alone. Most of it simply goes unnoticed because no government agency has time or the mandate to investigate.

In this case, foreclosures on these houses cost taxpayers a total of about $140,000 because the FHA protected the lenders.

Yet another in the endless list of hidden costs of illegal immigration and non-enforcement. But hey, the American taxpayers are an endless fount of greenbacks, right?

BTW - We have had the exact same issue here in the Dallas area where we now have the highest foreclosure rate in the nation. How strange that the explosion in foreclosures coincided with the explosion of illegals over the last decade and the easy loan programs for them over the last few years...

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Originally Posted by CrocketsGhost

In this case, foreclosures on these houses cost taxpayers a total of about $140,000 because the FHA protected the lenders.

Yet another in the endless list of hidden costs of illegal immigration and non-enforcement. But hey, the American taxpayers are an endless fount of greenbacks, right?

BTW - We have had the exact same issue here in the Dallas area where we now have the highest foreclosure rate in the nation. How strange that the explosion in foreclosures coincided with the explosion of illegals over the last decade and the easy loan programs for them over the last few years...

My understanding is that financial institutions that give mortage loans or banking privileges to illegals for the purpose of financial gain have broken 1996 INS laws against 'encouraging' illegal immigration and can be subject to RICO prosecution and triple damages. It's unfornuate that no one has taken the lead on prosecuting this, especially againsr the Federal Reserve, who is breaking it's own federal laws.

Hands down...this is the government's fault for not enforcing our borders. Secondly, it is the lender's fault. The mortgage biz is so highly regulated and it is a system of checks and balances. True, there are some crafty people who can cover their bases well enough to make a fake transaction look flawless, but it is my experience that there are more than one red flag in these instances. However, regulations make it perfectly clear NOT to discriminate. Do you ever wonder why loan applications ask about the borrower's race? It is to make sure that the lender does NOT discriminate. If a minority is about to be declined, they will do everything in their power to make the loan to avoid getting sued or hassled by the Examiners. That is the hazard in the transaction, if it is a marginal deal, they are probably more inclined to make the loan than to turn it down. The realtor would have no way of knowing the true staus of the borrower, unless they have a strong relationship with the lender and they are sharing information. In my experience, the salesman at the mortgage company will pretty much say or do anything to get the deal in the door, so it is up to the rest of the staff to keep an eye on things. (I don't agree with this, but that is reality). The processor and the underwriter needs to be closely watched on future deals, and the manager should get fired if they signed off on this deal when things did not look right.They are hurting their own business, the stockholders, and the rest of the US. With that being said, businesses are getting more specialized and are employing Spanish speaking employees to assist their Spanish speaking clientel. If you get some dishonest employees, it is easy to see how things can get out of control.

You notice since all this illegal invasion started, the country is becoming more and more corrupt at ALL levels.....How long before we are at the level of Mexico??

Shouldn't be long now, if they have their way. I am more worried at how mean the nice people will have to get just to survive.

This is pathetic. It is like a cancer. Remind me again of why we embrace the invasion? Why we are in full support of those who seek to completely undermine us?

I forgot they are poor therefore are stupid. Or they are poor so that gives them a right to break the law. They know not what they do!

I didn't cross the border the border crossed me!
Family values don't stop at the Rio Grande!
No human is illegal!
Jobs you lazy SOB won't do!

Wow! That really sums it all up. Good one.