Two Plead Guilty for Roles in Foreclosure Rescue Scam

Two men who allegedly operated online foreclosure rescue businesses pleaded guilty to conspiracy charges, the ""Office of the Special Inspector General for the Troubled Asset Relief Program"":http://www.sigtarp.gov/Pages/home.aspx (SIGTARP) announced in a statement.

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According to the statement, Mark S. Farhood of San Diego and Jason S. Sant of Lecanto, Florida co-owned Home Advocate Trustees, which also went by several other names, and they operated various websites that were used to deceive homeowners.

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Farhood and Sant claimed their businesses purchased distressed real estate to help homeowners avoid foreclosure. Instead, the properties were used to take over hundreds of residential properties, which were then rented out for profits.

The companies told homeowners they could negotiate with lenders to purchase mortgage notes at a discount and falsely claimed a 90 percent success rate in purchasing such notes.

To stall foreclosures, Farhood and Sant also submitted fraudulent loan modification applications for the Treasury's Home Affordable Modification Program (HAMP) without the homeowner's knowledge or consent. This allowed Farhood and Sant to maximize profits they were receiving from rental income. The homes that Home Advocate Trustees and its entities took over eventually ended in foreclosure.

""For nearly five years, in a nationwide scheme, Farhood and Sant personally profited from desperate homeowners and exploited TARP’s housing program, HAMP,"" said Christy Romero, inspector general for TARP.

Farhood and Sant each face a maximum penalty of 30 years in prison and when they are sentenced in August.