Edwin Josue Herrera Rosales, aka “Josh Herrera,” 34, of Washington, pleaded guilty today to a scheme to defraud 1,000 struggling borrowers facing foreclosure. Herrera Rosales pled guilty to one count of wire fraud conspiracy in connection with his operation of call centers known as “Sound Solutions Group,” “Community Assistance Hub,” and “Sienna Support Network” in California.
Herrera Rosales and his accomplices distributed solicitation mailers to troubled homeowners across the nation. Herrera Rosales’ group said in the mailers that it could help borrowers pay down their mortgage debts and reduce their mortgage installments. As customers contacted the contact center, they were put through a bogus “underwriting” process before being informed that the company’s legal and underwriting team had agreed that a beneficial mortgage adjustment could be negotiated in return for a $3000 upfront charge. Many of the customers did not get the promised changes because the contact center lacked legal and underwriting personnel.
Herrera Rosales allegedly plotted with others in Southern California to carry out the scam, according to court documents. Approximately 4,000 mailers were sent to troubled homeowners throughout the nation each week. The homeowner had been “pre-approved” for a new government scheme, according to the mailers, in which Herrera Rosales’ agency could arrange a mortgage adjustment. One mailer claimed that Herrera Rosales’ company could lower a borrower’s loan balance by more than $140,000 and lower the rate of interest to 2%. The residents were advised to contact the Everett help desk for help in the mailers.
Herrera Rosales was in charge of a team of call center agents. When borrowers called the call center, Herrera Rosales told the operators to read from a script that made it look as though each caller’s loan was being checked by the company’s “underwriting” and “judicial staff” to ensure the borrower was eligible for the ostensibly federal scheme. In reality, there was no legal division or underwriting team at the corporate office. Rather, agents were told to put each customer on hold for a specified period of time to give the impression that a review was in progress. The operator would then switch to the line and inform each victim that they were one of the “very select few” who applied for the program—but only if the applicant paid a $3,000 premium to the call center. If the customer objected to the fee, the call center agents used a different script that included some “hot button” comments to convince them to sign the papers. The charging of upfront costs for mortgage modification programs is prohibited under federal legislation.
After the documents were signed, the contact center forwarded the borrower’s papers to a California-based loan processing company, which attempted to restructure the mortgage with little success. While a small number of customers had their monthly payments drop, the vast majority saw no improvement or, in some cases, a rise. To hide their names, the call center used a fake address and employees used aliases.
About 1,000 consumers charged over $2.5 million to Herrera Rosales’ multiple agencies between March 2016 and May 2018. Herrera Rosales held about $360,000 after paying the call centers’ bills and a share of his co-conspirators.
