"Short-sale queen" indicted on fraud charges

A real estate influencer and self-proclaimed "short-sale queen" finds herself facing a potential hefty prison sentence after a recent fraud indictment.

A federal grand jury indicted Nicole Espinosa, owner of Dallas-based Short Sale Queen, and a pair of accomplices on two conspiracy charges in the Eastern District Court of Texas last month. Along with Espinosa, authorities also arrested Stephanie Parks and Selena Baltazar-Hill, with all three women accused of wire fraud and submission of false documents to financial institutions. 

Beginning in 2017, the defendants are alleged to have run a scam, whereby they found properties in the pre-foreclosure short-sale process and approached distressed homeowners to convince them to list the homes with their own businesses. After a homeowner agreed to the deal, the three submitted falsified forms, including purchase agreements from phony buyers and altered proof of available funds, to banks and mortgage companies, halting foreclosure and waiving collections. In an approved short sale, the original lender will agree to take a loss on the transaction to help avoid foreclosure. 

The phony sales then gave Espinosa and the other defendants time to find a legitimate buyer or, in some cases, cancel the first deal when one could not be found. Officials claim Espinosa, Parks and Baltazar-Hill submitted fraudulent documents for at least 88 properties resulting in over $8 million in sales. The total earned in commissions and fees from their sales exceeded $390,000, while financial institutions incurred more than $2.5 million losses from the scam. 

If convicted, the defendants could each spend as many as 30 years in prison. Investigators from the Department of Housing and Urban Development, Federal Housing Finance Agency and the Department of Veterans Affairs are taking part in the case.  

On the Short Sale Queen website, Espinosa claimed to have processed over 100 transactions each month. An author of the books "Mastering Short Sales" and "Short Sales Uncensored," Espinosa also hosted a weekly series on Youtube and made frequent appearances on podcasts to discuss business strategy for the niche short-sale market. 

The latest indictment is the second short-sale fraud case in recent weeks to land in headlines. Last month, a New York jury found a Brooklyn business owner guilty of short-sale fraud for crimes that took place over several years after the Great Financial Crisis. The New York case also involved falsified documents, with the perpetrators renovating many homes before flipping them at a much higher price than what they paid in the pre-foreclosure sale.