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Date Published
October 12, 2016
News Type
Article
Link to Original
www.nj.com/

(Source: nj.com) A former West New York commissioner will spend about a year on house arrest for collecting nearly $150,000 in rental income while being in default of a federal mortgage loan.

Ruben Vargas pleaded guilty to equity skimming in May after obtaining a $417,449 loan through the Department of Housing and Urban Development to buy a two-family home at 5512 Grant Place. Vargas collected about $3,000 each month in rental income from the property without making any payment on the mortgage that he obtained in 2007, U.S. Attorney Paul J. Fishman announced.

Vargas was sentenced Thursday to three years of probation with 10 months of location monitoring in Trenton. He was ordered to pay the federal government back the $149,900 he collected in rental income, but does not have to pay the interest on the loan.

By law, anyone in default of a HUD loan can only use rental income for necessary expenses to the property and for making payments on the mortgage.

Vargas served as a West New York commissioner from May 2011 to January 2015. His resignation came as a result of personal matters and later took a job with the city's housing authority...