Catchy Radio/TV Ads Lured Homebuyers Who Later Foreclose

How do you emigrate from Colombia, fleeing the Mafia, work your way up from doing work as a waitress and shinning shoes to owning your own real estate company, buy a $2.2 million privately gated mansion in Gilroy (2005) and a few years later (2008) attempt to sell it for $3.2 million?……Ask Maria Eugenia Avila (license record), former owner of the now defunct Rancho Grande Real Estate ( license record - doing business as Realty World Rancho Grande, Rancho Grande Financial, Mundo Real, the Mortgage Company and ACR Investments) in Gilroy and ACR Investments International Inc (license record) in San Jose.

The dynamic real estate duo of “Maria y Rafael” always had a catchy tune in their radio and television ads which were aimed to the Hispanic community. The commercials worked like a charm and got the attention of many Spanish speaking families looking to achieve the American Dream and buy a home.

One commercial would say “Rest assured that we are here for you…I assure you that you are in good hands….[we have] 10 years helping people like you become homeowners.” And so they did, families became homeowners and everyone was happy. But the happy dreams turned into harsh reality when some families making only about $15,000 a year claimed foul play in the purchases of homes with a hefty price of about three quarters of a million.

Alberto and Rosa Ramirez worked as strawberry pickers in Watsonville, each earning about $300 a week and Jesus Martinez with his wife worked as mushroom farmers each earning about $500 a week. Both families had dreams of leaving the renter’s life behind and buying a house and so the contacted Maria Avila through a magazine ad that said “With Maria and Rafael you can do it–you can buy a house. Buy with us and we’ll give you furniture.” A similar promise was made on another TV commercial where the deal was sweetened with a dinner for two and a ride on the “Maria y Rafael limousine.”

According to Rosa Ramirez, they wanted to buy in Watsonville but Avila said houses there were older and more expensive. So they ended up purchasing a $720,000 home in Hollister. The families worried about being able to make the payments but Avila eased the family’s fears by assuring them the monthly payments would be $4,800.

It did not happen that way, soon after the purchase, the payments went up to $5,200 because of the one-month “teaser rate” they received. “Our agent told us that once we refinanced, we could get the payments down to $3,000 or less,” said Rosa. After being confronted, Avila agreed to help with about $2,200 per month until the families could refinance in three to six months; an apparent common promise made by agents accused of wrong doings.

The Ramirez and Martinez families said that it felt a bid odd that Avila had agreed to help supplement the payments and as it turns out Avila claimed a newly found divine intervention by God. Avila told them, she had nearly escaped death just months earlier in a natural disaster in Cancun. And at the most terrifying moment she had promised God that if He let her survive, she would repay Him by helping an unfortunate family. She had indeed survived. So, said Maria Avila, she was simply keeping her word to God.

The time passed and the refinance never materialized and eventually Avila stopped subsidizing their payment in 2006 according to the families.

To make matters worst, the families have realized that despite their intentions to have both families purchase the home, the loan was made exclusively in Alberto Ramirez’s name. Maria Avila apparently manipulated Ramirez’s information to show him as an “agricultural expert” who owned his own business and boasted an income of around $100,000 a year.

The couple also discovered that they might have purchased an overpriced home when a new agent valued the home between $560,000 and $580,000. Ramirez defaulted on his loan a year and a half later after purchasing it in November 2005.

The families have sought the advice of an attorney who specializes in predatory-lending cases.

But this is not the only accusation of predatory lending Maria Avila and her company has received.

Maria Alarcon Garcia earned $350 per week picking “chile” and Julio Romero earned $512 per week repairing air conditioners. Both also wanted to achieve the American dream of buying a house and so they responded to a television ad. Eighteen months later their home was in default.

The duplex they found in Gilroy looked ideal to both Garcia and Romero, even with a price of $820,000. According to Garcia, they asked Avila if they could offer less but she said no. The couple ended with mortgage payments of $5,300 per month rather than $3,200 as promised by Maria Avila. When Garcia confronted Avila about the high mortgage payments, Avila asked to borrow the paperwork and agreed that the payment was excessive. Avila said she would look into it but never returned the couple’s phone calls.

MLS records show four months prior the home had sold for $685,000 through Rancho Grande Real Estate with Avila as the buyer’s and seller’s agent. There were no major improvements done and there were no multiple offers when Garcia and Romero bought it according to another agent. In addition, the home was not even listed on the MLS when it sold to the couple in December 2005 and Avila acted as both the buyer’s and seller’s agent again. Comparable duplexes including one on the same street block sold between $579,000 and $760,000, a big difference from the Garcia and Romero purchase price of $820,000.

Garcia claims that Maria Avila coached them to lie when the mortgage company called to verify their employment by providing a fake San Jose address and occupation. (Do you see a pattern here?)

Avila denied the allegation, speaking through her husband and attorney Rafael Hugo Cebrero (license record). Cebrero is the other half of the dynamic duo hence the team name “Maria y Rafael.”

According to the accusations in both cases, none of the buyers speak English so they were completely dependent on Maria Avila’s translation and guidance.

“I explain everything in Spanish to my clients. There is no way they can say they didn’t understand,” said Avila.

“Maria [Avila] didn’t explain anything in detail, she just said, this is for this, that is for that,” said Garcia.

Maria Avila said that ninety-nine percent of her clients are Spanish-speaking and prefer her office, which doesn’t look down on clients for the way they dress or the language they speak. On a letter addressed The Gilroy Dispatch editor, Avila and Cebrero wrote:

The situation of the Garcia and Romero family is heartbreaking, but it is a disservice…to let one family’s hardship…misrepresent more than 10 years of our ethical, proud service helping our Latino community achieve homeownership dreams…. Rancho Grande clients have an exceptionally low default rate of less than one tenth of one percent. Our business has a superior record and we are well respected…. Our success is based on demonstrated honesty and integrity in our local communities. We will continue to do business as we have since 1997: with honesty and the satisfaction of knowing that we are helping responsible, hard working families achieve their dreams.

Deidre Swesnik, director of public policy and communications at the National Fair Housing Alliance, said a study by the National Council of La Raza showed that nearly all mortgage advertisements in Spanish-language newspapers were for subprime brokers.

However, Rafael Cebrero, co-owner of Rancho Grande Real Estate, said subprime loans are getting a bad rap. Those loans, he said, have made it easier for many people, including Latinos, to purchase a home.

The Ramirez’s and Martinez’s’ situation is an unfortunate one, he said, but Rancho Grande was only trying to help the two families buy the home they wanted.

This lame excuse is commonly used by other agents accused of wrong doings. If these agents and brokers are failing to understand and recognize that these families never could afford to buy a home to begin with, then they should take a bow and walk away from the real estate industry completely.

Ironically, the “Maria y Rafael” couple seemed to look down upon certain agents that got into the real estate market during the housing boom. One of their commercials depicted a line up of “bad actors” posing as agents. One of them a very suspicious looking agent telling prospective buyers “I will qualify you, 425 fico score?….no problem.”

The self proclaimed “Most prestigious agents in the Bay Area” closed down their Rancho Grande office in Gilroy by mid December 2007 and their San Jose based business ACR Investments International Inc as well. The closing was due to the Department of Real Estate revoking the license of Maria Avila and the license for Rancho Grande Real Estate (doing business as Realty World Rancho Grande, Rancho Grande Financial, Mundo Real, the Mortgage Company and ACR Investments).

Avila went on to work under the brokerage Gente Real Estate (People Real Estate in Spanish) in the time between her business closing down and the DRE revoking her license this year.

“Any accusation that we file, it’s serious, the fact that these folks have closed down doesn’t have any bearing on the accusation that has been filed,” said Tom Pool, DRE spokesman. “One might think that it’s a good thing that they’re not operating any more,” said Pool.

Rafael Cebrero seems to have been inmune to the accusations made against his wife. Cebrero has a working real estate license and is now doing business under the same brokerage, Gente Real Estate.

The Ramirez and Martinez family have tried unsuccessfully to sell their home as a short sale but property records show they are still owners of the Hollister property. However, the Garcia and Romero couple lost their home in 2007. Ironically, perhaps karma, Maria Avila and Rafael Cebrero tried unsuccessfully to sell their mansion at the beginning of 2008 for $3.2 million. Their property was recently listed as a short sale for $1.9 million with a different brokerage.

The housing boom seemed like a blessing in the sky for everyone from sellers to buyers, agents, brokers, lenders, notaries, etc, etc. However it also was the perfect breeding ground for fraud. Almost nobody got caught doing it because properties were appreciating rapidly in value. Now that the market has slowed down, it has brought to light the true colors and intentions everyone had.

As advice for everyone buying a home, it is very important to bring along a trusted person who has had some type of experience buying a home before. If the English language is a problem, hire a neutral third-party translator to assist. Do not rely on the agent or broker to translate. Also, everyone has the option to take their final loan documents, prior to signing, to one of the many U.S. Department of Housing and Urban Development certified housing counseling agencies around the country for further review.

Anyone who has filed a real estate fraud complaint against any agent is encouraged to update his/her contact information with the Real Estate Fraud Unit’s Paralegal, Carol Vega (408) 792-2639.

Sources:

Metro Santa Cruz:
- Home Sweet Hell
Hollister Free Lance:
- Minorities Hit Hard by Foreclosure Crunch
- Foreclosure Looms For Farmworkers
The Gilroy Dispatch:

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