The Ventura County District Attorney’s office has struck pay dirt in its long-running investigation into mortgage fraud.

Grand jury indictments made public on July 31 after a series of arrests reveal how the FBI and Ventura County authorities found a pattern of abuse and fraud at New Concept Home Loans of Oxnard, an organization that allegedly generated dozens of home loans based on bogus documents.

The defendants, including Camarillo resident Jose Garcia and his wife, allegedly pocketed an average of $10,000 per loan. The loans were made in such a way that substantial numbers of loans went into foreclosure, with banks such as Countrywide Financial Corp. and Wells Fargo left holding the bag. Meanwhile, the Garcias cleaned up, according to an FBI press release that announced the indictments.

“This American dream quickly turned into a nightmare for these borrowers when they realized they could not afford their new home,” said a statement from Los Angeles U.S. Attorney Andre Birotte Jr.  The FBI and law enforcement officials believe the suspects caused some $11 million in losses for home lenders.

The New Concept Home Loans case is a crowning moment for Totten, who has had a tough hand to play as successor to Mike Bradbury in the role of district attorney. In addition to the long running investigation into mortgage fraud, he’s had to deal with Ventura County’s budget woes, a chronic gang problem in Oxnard and a broken California prison system that continues to operate under the supervision of the federal courts.

A recent Supreme Court decision that went against the administration of Gov. Jerry Brown means that another 10,000 California prisoners are likely to be released, which means local officials will get a largely unfunded mandate to supervise the newly-freed offenders. Totten and others believe a recent increase in property-related crimes is the direct result of the remittance program.

Still, getting a major indictment in the mortgage fraud case is a step in the right direction for the district attorney’s office and the nascent recovery in the housing market. One of the aftershocks of this meltdown is the absolute lack of confidence that the system for financing mortgages in the private market can ever be made to work again.

Proving to the public that there is a penalty to be paid for filing fraudulent documents is a first step toward restoring that confidence.