Three women from North Texas, including Nicole Espinosa, known as the “Short Sale Queen,” have been indicted on charges related to a mortgage fraud scheme, according to federal authorities.
Nicole Espinosa, 35, from Plano; Stephanie Smith, 44, from Midlothian; and Selena Baltazar-Hill, 28, from Dallas, are each facing two counts: conspiracy to commit wire fraud affecting a financial institution and conspiracy to submit false statements to a federally insured financial institution. A grand jury handed down the indictment on November 20, and the three suspects were arrested and are scheduled to appear before a federal magistrate judge.
The alleged fraud scheme dates back to 2017 when Espinosa, Smith, and Baltazar-Hill began running their operation through various companies, including Espinosa’s Short Sale Queen, L.L.C. The group targeted properties going through the foreclosure short-sale process, approaching owners to list their homes for sale, according to federal prosecutors.
Once the suspects had signed agreements with homeowners, they submitted fraudulent documents to financial institutions and mortgage companies, including fake purchase agreements and altered “proof of funds” letters. These falsified documents misled the institutions into halting the foreclosure process, waiving fees, and giving the suspects time to find legitimate buyers. In some cases, the deals were canceled if a buyer couldn’t be secured.
Prosecutors say the trio submitted fraudulent documents for at least 88 properties, totaling over $8 million in sales. They earned at least $390,000 in commissions and processing fees, causing a loss of more than $2.5 million to the financial institutions involved.
If convicted, the suspects face up to 30 years in federal prison.