California Mortgage Brokers Arrested For Theft

Brokers allegedly changed terms after customers signed documents

September 11, 2009
Three California mortgage brokers face charges of criminal conspiracy after they allegedly stole nearly $1 million from borrowers who were trying to refinance their homes.

California Attorney General Jerry Brown leveled the charges against 39-year old Michael McConville of Simi Valley, sales manager of ALG, Inc, a Los Angeles based mortgage company; Garrett Holdridge, 23, of Palmdale, California and Texas, loan officer for ALG, Inc.; and Alan Ruiz, 28, of Huntington Beach, also a loan officer for ALG, Inc.

Brown charges McConville and his co-conspirators lured dozens of borrowers into refinancing home loans by falsely promising low interest rates and brokers' fees, and other attractive terms. They then allegedly negotiated different terms with lenders, forged the victims' signatures on the final loan documents and collected hefty brokers fees - ranging from $20,000 to $57,000 - that were never disclosed.

Only when the borrowers received true copies of the loan documents after the refinance, Brown maintains, did they discover that their names had been forged. In total, defendants are accused of stealing over $950,000 from more than 70 borrowers, leaving victims holding $30 million in loans with terms they did not agree to.

"After victims signed their closing papers, McConville and his associates doctored the loan documents, forged borrowers' signatures and slipped in hefty fees that were never disclosed," Brown said. "This was not some clerical error but a criminal conspiracy to steal nearly a million dollars from borrowers."

Brown says McConville promised one couple a 5.5 percent fixed interest rate, cash-out of $58,000 and $4,500 in closing costs. Only after they signed the documents, they realized their copy did not include the pages detailing the key terms of the loan. The couple soon received loan documents from Indymac Bank and discovered their signatures had been forged and they had received a 7 percent interest rate, no cash-out, and over $50,000 in closing costs, including a $42,000 origination fee paid to ALG, according to the complaint.

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