A homeowner who thought she was refinancing her mortgage for a low fixed rate found out the meaning of the phrase "too good to be true."
She fell victim to bait-and-switch advertising.
Nerida Cuccia was in the market to refinance her mortgage when she spoke to Ricardo White and he offered her a 3.25 percent fixed interest rate the first year and a 5 percent fixed rate for the remainder of the loan.
She was interested, but White's tone made her hesitant.
"'You're so high pressure. You sound a little bit like you're forcing me into something,'" said Cuccia as she described her call.
White quickly apologized, and because of the attractive rates, Nerida decided to go ahead with the refinancing.
"People get pulled in by the numbers and then they get in the end they really pay a high price," said Cuccia.
"They would misrepresent the terms of the loans to induce the consumers into refinancing," said John Marsh, U.S. Postal Inspector. "The homeowners unwittingly got a very high adjustable rate mortgage and the fraudsters got a nice commission."
Postal inspectors began tracking the case and found it was a classic bait-and-switch scam at closing.
"They will have you sign documents that say 2.25 or 3.25 percent fixed. But that is not true, that is a fraud," said Marsh.
At the same time, they will have you sign more documents for the actual mortgage they plan to submit to banks. Those come with much higher rates.
In Nerida's case, she was promised 3.25 percent. In reality, she signed a loan that started at 8 percent the first year and would go as high as 15 percent.
"The set of documents they leave with you in no way, shape, or form will tell you what the terms of the loan are," said Marsh.
This is done by design and is at the heart of the scheme.
"They don't want you to realize you have been hoodwinked and cancel the loan in three days, which is the standard practice with loans," said Marsh.
Nerida's closing with White was held in her home.
"I felt like somebody walked into my house and robbed me blind," said Cuccia.
White was sentenced to 9 years in prison and ring leader Gregory Cooper was sentenced to 17 years. They had scammed more than 50 victims out of more than $2 million.
"To be able to face Mr. White in court and tell him how I felt, nothing could ever--the money, nothing--was as important as being able to look at his face once more and know he was going to jail," said Cuccia.
Cuccia in the story was able to refinance again, but she
lost more than $20 thousand in closing costs for both transactions.