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He's No Angel 

They once called him a savior who helped people in need. Today, Edwin Parada is accused of taking money from Latinos unfamiliar with real estate laws.

Wednesday, Jun 18 2008

Page 3 of 5

Marcelos had questions about the 100-plus-page pile of documents, but was told to wait until Edwin was back in town, he recalls. He left that day's appointment without copies of anything he had signed, a violation of basic real estate practices. It would be two years before Marcelos would see any of the documents, and only after incessant calls to Edwin by Marcelos' wife, Jackie.

When the Marceloses finally received the documents, they were shocked at what they saw. Instead of taking out an equity line as promised, Parada had actually refinanced their home, assigning himself a payoff of $200,000, according to the lawsuit.

"Parada put himself on the HUD1 [closing document], and the escrow company didn't make any inquiry whether that was a valid disbursement and gave him a cashier's check for $200,000," said Hochhausen, Marcelos' attorney.

Argent, one of the nation's largest subprime mortgage lenders, which underwrote the loan Marcelos took out to purchase the new home, declined comment pending litigation.

But Simone Katz, attorney for New Century Title Company, which was the escrow holder for the loan, said her client was simply following the instructions given by Mr. Marcelos and the lender, and so is not responsible for the money in question.

"The escrow company is there to process the paperwork and make sure the loan gets funded, not to police the transaction," Katz said, adding that the case has proceeded against all other defendants, including Commonwealth Land Title Company, which is the successor-in-interest to New Century, following New Century's dissolution.

"The escrow documents had written instructions, not from only from the lender, but from the borrower, which Mr. Marcelos had an opportunity to review," Katz says. He reviewed and signed those documents, so there would no reason for New Century to believe that this disbursement should not have been made."

When the Marceloses realized what had happened, they immediately contacted the San Francisco Police Department, the Department of Real Estate, and the San Francisco District Attorney's Office, but say their complaints fell on deaf ears. The Marceloses says the district attorney's office told them that there was such a backlog of cases that it would take three years before an investigation could begin.

"They didn't understand what we were talking about when we told them our real estate agent stole $200,000 from us," said Jackie Marcelos, who became so frustrated with what had happened that she began studying real estate.

Erica Terry Derryck, spokeswoman for San Francisco District Attorney Kamala Harris, said that a staffer met with the Marceloses last year and explained that the district attorney's office couldn't do anything until a criminal investigation had been completed and there was sufficient evidence to file charges against Parada.

In their frustration, the Marceloses also turned to the San Francisco Bar Association and several local nonprofits, who listened to their story, but couldn't do much. "Unless you have at least $40,000 in the bank for an attorney, you really can't do anything," Ricardo Marcelos says.

Mortgage fraud has jumped by 47 percent in the past year, with California considered one of the hot spots for the problem, according to the FBI. That's in part due to its size, but also because it's one of the few states where real estate agents can also work as brokers, eliminating the checks and balances meant to stop unscrupulous players, experts say.

"If you were to sign up for courses that are required to get your license, there is very little in there to discuss ethics or your fiduciary duty as a mortgage broker or agent," says Alameda County Deputy District Attorney David Lim, who prosecutes real estate fraud. "And because brokers are commission-driven, it eliminates a lot of checks that regulate what they do."

Primera Iglesia Bautista is the kind of unassuming Mission neighborhood church you can walk by dozens of times without noticing. A simple billboard near the door announces the Wednesday night Bible study, the Friday night teen ministry, and Saturday's family worship. But it is on Sundays that the Baptist church comes alive.

On a stage adorned with burgundy curtains and large vases filled with flowers, a band leads the worshippers in a song about Jesus Christ, the singer walking back and forth like a rock star. Women in their best heels and dresses cast their eyes toward heaven while simultaneously bouncing babies on their laps. Presiding over the celebration is Pastor Tony Lopez, a charismatic former Univision reporter who watches the undulating congregants, not unlike a king overseeing his subjects. His fingers are bejeweled with rings and his hair is perfectly combed.

It was Lopez who first introduced Edwin Parada to the congregation, after meeting the agent on the Spanish-language Christian radio show Parada had on 1010 AM. The men were both from El Salvador, and struck up an acquaintance. Later, when the church was gathering school supplies to send to El Salvador, Parada wrote three checks to help with the effort, Lopez recalls. "He did a lot of good for the church," said Lopez, who became a regular guest on Parada's radio show. "People would call me from their cars during the program to say that they had pulled over and were praying with me because they had been so moved by the sermon. And Edwin was the one who made it happen."

The El Salvadoran church is where Julia Lopez (no relation to Tony Lopez) first met Parada, whom the pastor presented to his congregation as a paragon of Latino success. Parada, then a mere 25 years old, won the crowd over with an easy smile and a few laughs, and then proceeded to tell them about his business.

About The Author

Karina Ioffee


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