Homeowners Lost Thousands in Loan Scam

Two suspects in a loan modification scam appeared in court Monday, accused of taking money from hundreds of homeowners desperate for help.

Prosecutors say two South Bay men promised help to struggling homeowners but then allegedly took their clients' money and spent it on themselves.

The prosecutors said more than 400 victims lost at least a million and a half dollars by sending their mortgage payments directly to suspects Jose Ruiz and Christian Hidalgo.

The homeowners had fallen behind on their mortgages and risked losing their homes, prosecutors said Monday.

Ruiz and Hidalgo allegedly sent letters to the homeowners, claiming to work for the federal government and promised to help reduce their loan payments. They used company names such as "Equity Choice," "Casa Nuestra" and "Nuestra Communidad Services" to attract homeowners.

Assistant U.S. Attorney Chistopher Tenorio said it's important to ask questions before signing a contract, and to follow up with law enforcement if a letter or confrontation seems questionable.

Ruiz and Hidalgo face charges of mail fraud and money laundering. A federal magistrate set bond for $40,000 each.