DCA Investigation of Predatory Lender Leads to Lawsuits, Arrests

Real Estate Fraud Division helps shut down Lifetime Financial,
accused of scamming California homeowners

A County of Los Angeles Department of Consumer Affairs (DCA) investigation against a predatory mortgage lending company has resulted in a $20 million civil lawsuit by the California Attorney General. San Bernardino County authorities arrested several people involved in the alleged scam on charges including conspiracy, grand theft, forgery and elder abuse.

THE SCAM ARTISTS:
Eric Pony, 25, operates Lifetime Financial, which also uses names of Nations Mortgage, Greenleaf Lending, Virtual Escrow, Olympic Escrow and Direct Credit Solutions. Pony also uses the alias “Oren.”

Pony’s sister, Paulette, and mother, Wilma, are also accused in this scam.

THE SCAM:
Lifetime Financial is accused of predatory lending and bait-and-switch tactics to victimize consumers, many of whom have lost their homes.

They promised unrealistically low mortgage payments then switched them to loans that do not match the original agreement. Telemarketers lured consumers by telling them they can get a fixed-rate loan of 5 to 6 percent and lower monthly payments.

Consumers often wound up with loans that had worse financial terms than their original mortgage. Some loans had hidden fees of up to $20,000. Some consumers had payments that exceeded their entire income. Many consumers either lost their homes to foreclosure or are facing foreclosure.

THE VICTIMS:
The exact number of victims is unknown. Pony is believed to have arranged thousands of loans.

Luis Garcia, a 75-year-old disabled senior from Peru, is typical of many of Lifetime Financial’s victims.

Garcia does not speak much English. Lifetime Financial contacted Garcia in Spanish and promised to refinance his mortgage into a low, fixed rate. Garcia agreed to a 50-year loan with $1,000 monthly payments. Instead he received a letter, written in English, from New Century Mortgage stating that his new loan rate was 7.95% and his initial monthly payment would be $2,254.

Family and translators helped Garcia find out that Lifetime Financial had falsified his information, including his monthly income and work history. Garcia was unable to afford the high payments and eventually lost his home.

THE ACTION:
DCA’s Real Estate Fraud and Information Program conducted a yearlong investigation into Lifetime Financial. With that information, the office of California Attorney General Edmund G. Brown, Jr. filed a civil action and froze the companies’ real estate and bank accounts and forbade them from engaging in further predatory practices.

The Attorney General also seeks an estimated $20 million in penalties and restitution.

The San Bernardino County District Attorney’s office filed criminal charges against seven people involved with Lifetime Financial. Four are in custody.

"With the housing market in crisis, real estate fraud is on the rise," Department of Consumer Affairs Director Pastor Herrera, Jr. said. "We encourage homeowners to contact us with questions or problems involving home loans."

WHAT VICTIMS SHOULD DO:
If you are the victim of Lifetime Financial or any real estate fraud, contact DCA at (800) 973-3370. Visit the department’s website at dca.lacounty.gov.