A California mortgage broker is accused of originating loans for World Savings Bank without a license — then keeping borrowers’ loan proceeds for himself.
Altaf Shaikf reportedly told police that he used his alias Zak Khan because it was easier for people to pronounce, and a foretelling choice of name it turned out to be. Shaikf allegedly conned up to 129 borrowers into signing mortgage documents with false information while also stealing the cashout intended for the borrowers.
Ironically, the unlicensed mortgage broker was under a cease and refrain order from the California Department of Real Estate at the time, according to one of the victim’s attorneys, Bill Purdy.
The attorney said his firm is representing more than a dozen victims of Shaikf’s scam — and the list is growing. “This wasn’t the only county (Santa Cruz) he worked in,” Purdy told MortgageDaily.com. “There are a lot of people out there that aren’t necessarily aware (of the scheme).”
Purdy said Shaikf would solicit potential victims over the phone with promises of lower payments at incredibly low fixed rates that were actually adjustable rates, using a telemarketing company of which he was president, Bay Area Telemarketing. After setting an appointment, Shaikf would go to the applicant’s home, have them sign the documents, leave without supplying copies of the documents and, purportedly, the title company would then send the completed paperwork back to the borrower at a later date.
The scam began as far back as April 2004 and was not realized until last May when a new homeowner in Watsonville, Calif., reportedly noticed a discrepancy in closing costs, according to Santa Cruz District Attorney Bill Atkinson.
Atkinson said a notary book was found in Shaikf’s office with at least 150 different names of borrowers that Shaikf might have bilked out of thousands of dollars. “He submitted 129 loans through Secure Financial, Inc.,” Atkinson told MortgageDaily.com. He added that World Savings Bank funded all of the loans.
Authorities were yet unable to answer the question of how Shaikf was allowed to operate unlicensed for Secure Financial or why the title company didn’t conduct the closing.
Representatives from Secure Financial could not be reached for comment.
Atkinson said Shaikf is being charged with at least 11 counts of first-degree burglary, which could put him behind bars for a maximum of almost 20 years if he is found guilty.
