Modesto realty firm's owner held on fraud claims

A Modesto real estate company owner was arrested last week on suspicion of mortgage fraud.

Phil Sotelo, owner of Realty Executives Sotelo & Associates, recorded phony documents at a county office and refused to leave his north Modesto home after it was sold at public auction, according to an arrest warrant affidavit.

An Internet search suggests Sotelo also is affiliated with Classic Real Estate and has worked with other Modesto firms since 1989.

Contacted by telephone, Sotelo referred questions to his attorney, who declined to discuss the case.

Owing about $1.4 million on his Papillon Drive home in a gated community, Sotelo posed as a representative of his lender and deeded the property to a corporation he owns, the affidavit says. He is registered to vote at that address.

But documents Sotelo filed with the Stanislaus County recorder's office were "totally fraudulent," the lender's attorney told a district attorney's investigator earlier this month, the affidavit says.

Sotelo acknowledged filing the documents after studying an Internet site purporting to stop foreclosures, investigator Glenn Gulley said in the affidavit. The company claims that lenders don't have legal rights and charges $197 to guide customers through a loan elimination process.

The home sold at auction for $631,712, but Sotelo posted a notice on his front door warning away anyone trying to evict him, the affidavit says.

Bee staff writer Garth Stapley can be reached at gstapley@modbee.com or (209) 578-2390.