A previously incarcerated Lakewood, Colorado mortgage broker is accused of committing more fraud.
According to an Affidavit for Arrest Warrant filed in Jefferson County District Court, Randy Mitchell Romero, 49, was convicted of several counts of securities fraud more than five years ago and served time in prison. Most of his recent victims allegedly had no idea about his previous conviction.
Romero recently operated through his wife’s company, American Home Mortgage Consultants Inc., originating primarily subprime loans. As a loan officer for the company she owned, Lynda Romero earned $17,500 monthly, according to the affidavit.
Romero was discharged from bankruptcy in 1999, according to public records.
Investors in American Home Mortgage gave Romero more than $2 million, the affidavit said.In return, some received a number of postdated checks, and others received short-term promissory notes. The invested funds were to be used for short-term loans to unqualified borrowers.
When checks were deposited, they bounced, according to the affidavit, and some investors presented investigators with inch-high stacks of returned checks.
On some occasions, when pressed for documentation of their arrangements, Romero allegedly declined and told investors that he was a Christian businessman who did business on a handshake.
Romero duped one couple whose children had been friends with his children for many years, the affidavit said. The couple was aware of Romero’s criminal background, but invested $30,000 on the basis of their belief that he had rehabilitated and that they would have a deed of trust as security. When the checks didn’t clear, the couple allegedly learned that the deed of trust was fraudulent.
Another investor, who gave Romero $50,000, was allegedly given a worthless deed of trust on the home where Romero lived which was owned by his wife. While a recorded deed (filed in the wrong county) was provided by Romero, loan documents seized reportedly indicate that Romero’s wife did not disclose that deed as a lien on her property on a subsequently completed 1003 loan application for a $442,000 mortgage from New Century Mortgage.
The New Century loan file showed that “Blake Pedigrue” of Old School Financial was the interviewing broker, according to the affidavit. However, when contacted by the investigator, Blake Pettigrew said that while he was originally contacted by Pete Palermo of New Century in July 2002 about running Lynda Romero’s loan through Pettigrew’s company because of an internal policy that brokers cannot apply through their own company, he never authorized his name to be signed on the application.
The New Century loan, which included cashout, left the junior $50,000 lien worthless, the affidavit said.
Another investor, who had a valid lien on the wife’s property, claimed he refused Romero’s request to release the lien so the first mortgage could be refinanced. The affidavit said the investor had already received $9,200 in bad checks and emphatically told Romero that he would not sign it. However, a notarized release with the investor’s signature was found in the New Century file. The investor denied it was his signature.
One borrower allegedly deposited more than $20,000 with Romero to be used as a down payment. However, closing documents showed no down payment and a 104% loan-to-value mortgage. When confronted by the borrower, Romero allegedly admitted that he had deposited the check but lacked the funds to repay it.
The affidavit said fraudulent loan files were submitted to wholesale lenders including Express Capital Lending and Mandalay Mortgage, both in southern California. Allegedly among the fraudulent items were income documentation and inflated appraisals.
According to 9NEWS KUSA-TV, Lynda Romero is free on bond, while Randy Romero is being held in the Jefferson County Jail.
The listed number for American Home Mortgage is disconnected.
