California real estate execs arrested in alleged foreclosure scam

Authorities arrested three top officers at Stockton, Calif., real estate company who allegedly took in steep fees without performing loan modifications. Magdalena Salas, owner of Legacy Home Loans and Real Estate, along with Angelina Mireles and Julissa Garcia, were arrested Thursday on 13 felony and two misdemeanor counts that include conspiracy, grand theft and false advertising. The three allegedly took up to $5,000 in upfront loan modification fees from dozens and never performed services. The company, from November 2009 through August, advertised in different media and in English and Spanish about “guaranteed new lower mortgage payments,” according to a release from the Office of the Special Inspector General for the Troubled Asset Relief Program. In one such advertisement, Legacy CEO Garcia says “we would never let [foreclosure] happen to you.” Salas was also arrested on a count of engaging in real estate without a license, according to the filed complaint. None of the three is a registered Realtor, according to the California Association of Realtors. SIGTARP and the California Attorney General investigated the company along with local authorities. “The mortgage crisis has caused tremendous damage to our state and to California families,” state attorney general Kamala Harris said in a release. “There is nothing worse than those who seek to capitalize on this devastation by defrauding Californians who have already been victimized in this crisis.” About one in every 148 housing units in Stockton received a foreclosure filing in October according to data firm RealtyTrac. The three were held at the San Joaquin County Jail on $100,000 bail. Legacy’s office could not be reached. Write to Andrew Scoggin. Follow him on Twitter @ascoggin.