By Allan Lengel
Washington Post Staff Writer
Tuesday, December 18, 2007; A01

The sidewalks are still scrubbed and most lawns are neatly trimmed, but now the subdivision of townhouses off Route 1 in Woodbridge is pocked with empty windows and foreclosures. Federal investigators are poking around.

Sources with knowledge of the probe at the Villages at Rippon Landing said investigators are examining why a number of townhouses in a five-block area were bought and resold quickly, for a large profit, even as the real estate market was cooling and unsold homes dotted the neighborhood. The new buyers sometimes failed to pay the mortgages, sending homes into foreclosure and hurting lenders. Renters found themselves unexpectedly forced to move.

The FBI this month launched a mortgage fraud task force, gathering federal prosecutors and law enforcement officials from Prince William, Loudoun and Fairfax counties to map out a strategy to tackle the issue region-wide. One of the federal investigations is centered on Rippon Landing, according to Steve Durst, a U.S. Postal Inspection Service spokesman for the D.C. division, whose agency investigates mortgage fraud because it involves use of the mail. Durst declined to elaborate.

The FBI is also involved in the probe, according to sources familiar with the investigation. Adam Lee, a supervisor for the FBI squad that oversees mortgage fraud investigations locally, declined to comment on the Woodbridge probe but said of mortgage fraud in general, "Right now we have a full plate of those type of cases." An FBI report pegged the amount of fraud in 2006 at $4.2 billion nationally. Those cases often involved the use of bogus appraisals to obtain inflated loans, sometimes with the buyers and sellers working together to defraud the lender.

H.T. Thompson, who was renting one of the Rippon Landing townhouses, began receiving foreclosure notices addressed to the owner several months after moving in. "I said to my husband, 'This house is about to go into foreclosure.' " It did, and her family recently was forced to move. "It has disrupted our whole life," she said.

A Northern Virginia appraiser who spoke on the condition of anonymity said he approached authorities several months ago after becoming suspicious when a client told him about an opportunity to make quick money from buying a townhouse in the Woodbridge subdivision. He reviewed land records in Rippon Landing and found that some of the sales prices had unexpectedly spiked at a time when the broader market was falling.

The subdivision is part of a sprawling 186-acre community at Route 1 and Rippon Boulevard being developed by D.R. Horton of Fort Worth, one of the nation's largest home builders. Construction at Rippon Landing started in 2005, and people began moving in about January 2006, the height of the housing boom. During that period, properties were quickly snatched up, and townhouses were selling in the upper $500,000s, according to residents and property records.

The real estate market began weakening in the middle of the year, prices in the subdivision plummeted, and there soon were a number of townhouses unsold in the neighborhood. The price of new townhouses fell to the mid-to-low $400,000s, and some eventually dipped below $350,000.

Yet even as demand for the subdivision's townhouses was softening, investors -- including a mortgage broker, some real estate agents and other businessmen -- bought more than 20 new units from the builder for $407,345 to $470,890, and then resold them in a matter of weeks or months, making a $110,000 to $160,000 profit per house, according to land records. Some of those townhouses were never occupied and went into foreclosure, according to county land records and residents of the neighborhood.

The developer, D.R. Horton, did not return several calls placed over several weeks.

Several major lenders that provided loans for the Woodbridge purchases did not return phone calls or declined to comment.

The Virginia Real Estate Appraiser Board said it has received a complaint involving Marc Schoeni of Alliance Appraisal Services in Alexandria, whose company performed appraisals on some of the higher-priced properties. Schoeni defended his appraisals in the neighborhood, saying they were backed up by comparable sales and buyers' willingness to pay the higher prices.

According to land and real estate records, Zak Ahmadzada, a mortgage broker with American Affordable Homes in McLean, and Khalid Mirza, a real estate agent with Re/Max Champions in McLean, were involved in many of the transactions.

Land records show that Ahmadzada bought three townhouses in the Villages at Rippon Landing in 2006 and 2007 for prices ranging from $418,550 to $439,615. He sold two of them months later for $570,000 and a third for $585,000. Some investors said Ahmadzada arranged for buyers' loans for several townhouses at the higher prices, with no down payments and 100 percent financing.

Mirza is listed as the agent for several of the homes that were purchased at the lower prices in Rippon Landing, according to Metropolitan Regional Information Systems, a database of homes for sale in the area. MRIS records do not show who the agent was for the subsequent sales at the higher prices. Web sites and ownership records show that Re/Max Champions and American Affordable Homes are in the same building and have the same chief executive, Azim Feda.

Feda's wife, Paula A. Feda, chief operating officer of the mortgage company, said Ahmadzada left American Affordable Homes in June. She said she was not aware of details of the loans, but that her husband would address the issue. He did not respond to repeated calls.

Attempts to reach Ahmadzada for several weeks were also unsuccessful.

Mirza said he was not involved in any of the resales at the higher prices and that he was not involved in anything improper.

"I don't know what's going on," he said, adding that paying $585,000 was "so high it doesn't make sense. It looks suspicious."

Mirza, a Pakistani immigrant, said he was involved in the sale of the houses from the builder to others in the Pakistani community at the lower price of $400,000-plus.

"Everybody jumped in because they knew the price was good," he said, adding that he did not know "what they did after that."

Shahbaz Iqbal, a wholesale car dealer in Fredericksburg, said Khalid Mirza was a customer of his who had a role in duping him and his sister-in-law into buying two Rippon Landing townhouses in February and March for about $580,000 each. Iqbal said one of his former salesmen -- Saeed Mirza, a friend of Khalid Mirza's from the same town in Pakistan -- owned one of the townhouses. Ahmadzada of American Affordable Homes arranged for the 100 percent financing, he said.

Iqbal said Saeed Mirza told him and his sister-in-law that he would cover the first three mortgage payments. After three months, Iqbal said, Khalid Mirza and Saeed Mirza said both homes could be sold for a profit of $50,000 to $100,000 each.

But after a few months, the lender called Iqbal's sister-in-law and said the property sold by Saeed Mirza was going into foreclosure because no mortgage payments had been made. Iqbal said he felt terrible for his sister-in-law, so he made the payments for both properties to keep it out of foreclosure. "I'm a victim, it looks like to me," he said. Iqbal's sister-in-law, confirmed his account.

But Khalid Mirza, the real estate agent, said Iqbal's story was false. He said Iqbal approached Saeed Mirza and said his sister-in-law wanted to buy the townhouse. Khalid Mirza said Iqbal asked him if it was a good investment, and he answered, "You're buying it at a very high price." He said he drew up the sales contract as a favor to his friend, Saeed Mirza, and received no commission.

"I'm not involved, and my company is not involved," he said.

Saeed Mirza said that he never offered to make the first three mortgage payments and that Iqbal wanted to buy even after he was told the price was high.

Another investor, Wayne A. Lee, bought four townhouses in the subdivision in late 2006 for $570,000 and a fifth for $580,000. Two of those properties were purchased from Zak Ahmadzada, who paid $418,550 and $426,700 just months before, according to land records.

Today, three of Lee's homes are in foreclosure and listed for sale for less than $350,000. Lee declined comment Friday on the advice of his lawyer.

Another person, who spoke on condition of anonymity out of concern for his safety, said he was offered an opportunity to buy a townhouse in the subdivision for about $450,000 and then to sell it for about $580,000. He was told he could keep about $45,000 and the buyer, mortgage broker and real estate agent would split the rest. He was advised by a banker not to take part in the deal.

These sales and foreclosures have disrupted the lives of families not involved in the transactions. Damion Coates and his fiancee moved from Florida to Rippon Landing in March. Every month, Coates said, he deposited his $1,700 rent into a Wachovia bank account under the name of owner Jose Medrano. He said he told Nadin Samnang, the real estate agent representing Medrano, that he wanted to meet with Medrano but was never able to do so.

Land records show Samnang and two family members bought that townhouse and two others three days apart in late February and early March for about $460,000. Three weeks later, they sold them, making more than $100,000 profit on each.

Messages left on Samnang's work and cellphones went unanswered. His brother, Nady Samnang, said the siblings bought up "undervalued" homes, fixed them and sold them. He said he didn't know whether any of the three homes was fixed up. Medrano could not be located for comment.

Coates recalled that one day, a man who said he represented a lender came to the door, thinking Coates was the owner, and told him he was $10,000 behind in mortgage payments. Afterward, Coates said he called Nadin Samnang, who assured him everything was fine.

But weeks later, on Oct. 26, Coates said he accidentally opened a letter addressed to Medrano. It said the property was in foreclosure and would be auctioned Nov. 7. He decided to move.

"It's horrible. . . . At the same token I'm trying to keep a good attitude. It could have been worse," he said. "The bank's the real one that's getting scammed."

News researcher Meg Smith contributed to this report.