Tag Archives: real estate scams

Need a Loan Modification? Be Careful

loan modification

As part of a consumer alert, Attorney General Jerry Brown’s office issued the following tips for homeowners to avoid becoming a victim:

DON’T pay money to people who promise to work with your lender to modify your loan. It is unlawful for foreclosure consultants to collect money before (1) they give you a written contract describing the services they promise to provide and (2) they actually perform all the services described in the contract, such as negotiating new monthly payments or a new mortgage loan. However, an advance fee may be charged by an attorney, or by a real estate broker who has submitted the advance fee agreement to the Department of Real Estate, for review.

DO call your lender yourself. Your lender wants to hear from you, and will likely be much more willing to work directly with you than with a foreclosure consultant. (My experience is that this statement is partially true However, they will listen to an attorney before they will listen to you. Some of the original mortgage contracts that consumers signed are fraudulant)

DON’T ignore letters from your lender. Consider contacting your lender yourself, many lenders are willing to work with homeowners who are behind on their payments.

DON’T transfer title or sell your house to a “foreclosure rescuer.” Fraudulent foreclosure consultants often promise that if homeowners transfer title, they may stay in the home as renters and buy their home back later. The foreclosure consultants claim that transfer is necessary so that someone with a better credit rating can obtain a new loan to prevent foreclosure. BEWARE! This is a common scheme so-called “rescuers” use to evict homeowners and steal all or most of the home’s equity.

DON’T pay your mortgage payments to someone other than your lender or loan servicer, even if he or she promises to pass the payment on. Fraudulent foreclosure consultants often keep the money for themselves.

DON’T sign any documents without reading them first. Many homeowners think that they are signing documents for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership to the “rescuer.”

I am a partner with Sarah O’Neal, an attorney and we can help you with your loan modification or short sale. We do not take upfront fees. You are asked to fill out an application to determine if you might qualify for a loan modification. After reviewing your application, Sarah can advise you if you might qualify for a loan modification. See our website for more information Lets Stop Foreclosure

Craigslist, A New Twist on an Old Real Estate Scam

house-for-rent

In a different twist on an old scam, real estate scammers are using new tricks to try to pull a fast one on people searching for a place to rent.

Although everyone thinks they would never fall for a scam, it can happen to anyone. Recently, the people doing the tricking are getting more creative.

You may know that agents list properties for sale on Craigslist.

Instead of just trying to get you to send money in exchange for a key, sight unseen, now scammers are actually putting victims in touch with legitimate real estate agents.

The individual is being told, call the agent, they’ll show you the property, but don’t say anything about renting because I’m the owner and I don’t want them to know I’m going to take the listing away from them.

Once the potential renter has fallen in love with the house, they’re told to send the alleged owner a security deposit. With one pen stroke, the scammer has tricked both the buyer and agent.

Now that they’re more aware of the issues, most agents are being pro-active and trying to stop any fake rentals before things go too far.

Your best protection is to ask the agent if the owner wants to rent the house. Most listing agreements cannot be cancelled by the owner unless the real estate agent agrees to the cancellation.

The best advice, however, is to work with someone you trust, and remember if it seems too good to be true, it probably is.

It is important to note that there are legitimate listings on Craigslist. The site has become a popular place for agents to post listings. If you are searching on Craigslist, just remember to use caution and do your research if you find something that interests you.

Careful of Revese Mortgage Scams

Robert C. Weaver Federal Building HUD Headquarters
Robert C. Weaver Federal Building HUD Headquarters

The FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) urge consumers, especially senior citizens, to be vigilant when seeking reverse mortgage products. Reverse mortgages, also known as Home Equity Conversion Mortgages (HECM), have increased more than 1,300 percent between 1999 and 2008, creating significant opportunities for fraud perpetrators.

Reverse mortgage scams are engineered by unscrupulous professionals in a multitude of real estate, financial services, and related entities to steal the equity from the property of unsuspecting senior citizens aged 62 or older or to use these seniors to unwittingly aid the fraudsters in stealing equity from a flipped property.

In many of the reported scams, victim seniors are offered free homes, investment opportunities, and foreclosure or refinance assistance; they are also used as straw buyers in property flipping scams.

Seniors are frequently targeted for this fraud through local churches, investment seminars, and television, radio, billboard, and mailer advertisements.

A legitimate HECM loan product is insured by the Federal Housing Authority (FHA). It enables eligible homeowners to access the equity in their homes by providing funds without incurring a monthly payment. Eligible borrowers must be 62 years or older who occupy their property as their primary residence and who own their property or have a small mortgage balance. See the FBI/HUD Intelligence Bulletin for specific details on HECMs as well as other foreclosure rescue and investment schemes.

Seniors should consider the following:

* Do not respond to unsolicited advertisements.

* Be suspicious of anyone claiming that you can own a home with no down payment.

* Do not sign anything that you do not fully understand.

* Do not accept payment from individuals for a home you did not purchase.

* Seek out your own reverse mortgage counselor.

If you are a victim of this type of fraud and want to file a complaint, please submit information through our electronic tip line or through your local FBI office. You may also file a complaint with HUD-OIG at HUD Complaints or by calling HUD’s Hotline at 1-800-347-3735.

Source: PopDeCay

Another Real Estate Scam, Call Me on My Foreign Mobile Phone

mobile-phone-scam

One of the scam’s that has been going on since at least 2007 is to send an e-mail to you stating they are interested in viewing one of your properties. The e-mails are usually sent to someone who is renting property and Realtors® seem to be a prime target.

The e-mail goes something like this:

“I am interested in viewing one of your properties, could you please call me on my foreign mobile +882 135 502 99 to setup a time. As I am travelling at the moment I am unable to pickup emails regularly so please call.
Kind regards,
Liz Casey
———
Mobile: +882 135 502 99 (of course do not call!)
Email: lizcasey@zapak.com”

~~~~~~~~~~
It’s obvious that if you receive an e-mail like this that it’s a scam. There is no mention of what property they are referring to, or if there is, the next thing they will do to get your money is send you a bogus check as a deposit to hold the property, most often in the form of a certified check. Next, they will e-mail you and say they have overpaid you, or they decided they did not want the property and request a refund.

I Googled this scam and came up with someone who had experience with this and here is what they wrote:

“They will eventually get around to talking you into discontinuing the ad then they will send a counterfeit check. Next comes a request to refund some of the money from the bogus check claiming they overpaid. It’s amazing that folk’s fall for these scams. We played one along and got a $25.00 reward for turning the check over to the bank. If you play along with a scammer and receive a check. don’t handle it, the FBI may want to lift prints from it.”

I’m not sure the FBI is interested at all. The last time I tried to report a scam they were not interested and really did not even want to talk about it..
.

FTC Cracks Down on Real Estate Con-Artists

mouse-scammer

I was wondering when the Fed’s were going to crack down on con artists which advertise get rich quick schemes in real estate. The con artists offer to make you rich by using their “proven techniques in real estate”

These con artists also offer help on repairing their credit, landing new jobs, starting lucrative work-at-home businesses and obtaining government money to pay off bills. Surging like the unemployment rate, scams, touted on Web sites and infomercials, have bilked consumers out of hundreds of millions of dollars, according to the Federal Trade Commission.

Last Wednesday the FTC, working with local authorities across the country struck back and filed criminal charges against many of the scammers.

According to the Chicago Tribune

“The (FTC) announced a series of civil and criminal charges against alleged con artists who have preyed on economic anxiety to lure consumers into making upfront payments for services that either fall far short of the promises or never materialize.

“To con artists, today’s challenging economy presents an opportunity to exploit consumers’ fears and bilk them out of money,” said David Vladeck, director of the Federal Trade Commission’s Bureau of Consumer Protection.

Vladeck said that more than 100 cases have been filed nationwide this year as part of Operation Short Change, a task force consisting of the FTC, the Justice Department and officials in 13 states and the District of Columbia. The cases included eight filed Wednesday by the FTC.

One of the new cases alleged that five California companies bilked hundreds of thousands of consumers nationally out of about $300 million by offering fraudulent programs related to real estate or online businesses.

The companies — John Beck’s Amazing Profits, John Alexander LLC, Jeff Paul LLC, Mentoring of America and Family Products — and five people who founded or run them were accused of violating federal laws related to telemarketing and consumer fraud.

The FTC accuses the companies of making “false and unsubstantiated claims about potential earnings” customers could make by following their advice in books, DVDs and CDs titled “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days” and “Jeff Paul’s Shortcuts to Internet Millions,” which sold for $39.95 each.

People who purchased the programs unknowingly were signed up for additional monthly charges of $39.95. Messages left with the companies were not returned Wednesday.”

I did a Google search and John Beck’s site is still up and running, ready to take your money and help him get rich.

Hard Money Lender Tom Hastert Demands Jury Trial

Thomas Hastert
Thomas Hastert

It’s hard for me to imagine a man like Thomas Hastert a man who worked so hard to get ahead in this world becoming a felon. Hastert worked for the Nevada County Sheriff’s office, studied to become an attorney, then got his real estate broker’s license.

Once he got his broker’s license he proceed to engage in hard money lending in direct conflict with the law, making construction loans without fully funding them, a felony.

In addition, Hastert pleaded no contest to 62 counts of embezzlement, offering and selling unregistered and unqualified securities by false and incomplete communications. According to the Attorney General of California amounting to $20 million lost by his clients. That’s a lot of money to handle and lose. A standard fee for the mortgage broker Hastert is to charge is about 3 percent of the loan amount which means Hastert would have pocketed about $600,000.

Hastert’s attorneys and the California Deputy Attorney General Keith Lyon had reached a plea bargain that would have given Hastert five years in state prison. Normally that type of sentence means two and one-half years and he’s out of prison.

However, at the sentencing Judge Sean Dowling rejected the plea agreement and came back with his own sentencing of eight years and four months. Hastert’s attorney refused the new sentencing and demanded a jury trial.

I met Thomas Hastert some time ago, while he was an attorney. I did some investigations (as a civil engineer) for Hastert regarding building code violations for some of the real estate cases that he had. My impression of him at that time was that he was a nice person and I had no idea that he would resort to what he did. What does a person like that think? We have the Bernard Madoff, the Sir Walter Stanford’s who look you in the eye with a smile and steal your pocket book at the same time.

What do you think?

Craigslist Classified for Rent Scams

sceme-picture

Although millions of transactions spawned by Craigslist are completed without a problem, there is always someone out there using it to steal someone’s money. So goes the tale of a West African scammer who took the address of a home in Lexington that was listed for sale and advertised it on Craigslist as one of his rentals. Saying that he was in West Africa on a land deal, he gave instructions the prospective renter to send a deposit and first month’s rent to a specified address and the keys for the house would be sent by mail.

People who wanted to rent the property, saw a for sale sign and called the listing agent telling her that they had seen the house for rent on Craigslist. The listing agent became aware of the scam and contacted Craigslist. She discovered that that the con artist had used her listing photographs and details of the property from her listing information and had used his contact number instead of her. The listing agent contacted Craigslist and told them of the scam and she hopes it is gone. The twist in this story – the property had been sold even before she got any calls for renting the property.

Here’s another one, how about a Nigerian “pastor” who was trying to collect rent on a Delta Township home to which he had no connection?

The homeowner’s were not amused when all of a sudden, their house which had no activity all of a sudden had tons of people driving by and looking at their home. They were picking up flyers and people were getting out of their cars and looking around their home.

One of the browsers approached the homeowners and wanted to confirm that the house was for rent. Available for WHAT? Was the astonished reply by the homeowners. It seems the home was listed for rent by the good pastor for $1,300 a month, including utilities, dogs and cats were welcomed. Now for a 2,000 square foot home in a good neighborhood this is really a good deal. And we all know if it’s too good to be true, well, it’s not true. The bogus ad had gone up the previous night on Craigslist and the next day the home was bombarded by lookers. The ad on the Internet classified ad site: $1,300 per month plus a $500 deposit.

The agent acknowledged that Craigslist was among the many places he listed the house, but never as a rental. Somebody simply lifted the text of the ad and created a new ad in the hope of collecting as much money as possible before being exposed.

The man who posted the ad called himself “Pastor Heller,” and he tells a story about having to abandon the Delta Township home for an emergency trip to Africa. He asks for $1,300 – one month’s rent, plus a $500 deposit, to be sent through Western Union. He promises to Fed-Ex the keys after receiving the money. I wonder why he picked the name Pastor HELLer?

You know that most of the ads on Craigslist are valid, but if you see one where the ad states that you are to send money by wire or mail, beware, it might be Past HELLer.

Where to Get Honest Foreclosure Help

 

George Adamson the man Who Lived With the Lions  See link at bottom of page to go Adamson's home page
George Adamson the man Who Lived With the Lions See link at bottom of page to go Adamson's home page
 Here are places to get help if you or a friend are facing foreclosure.  There are so many scams out there now that it can be difficult to find legitimate help. Be careful of paying money up front in order to get help and some of the Internet advertising that says they guarantee that they can stop your foreclosure.

Here’s a list of programs that are either operated by the U.S. government or have its seal of approval:

  • Call (888) 995-HOPE, the Homeowner’s HOPE Hotline to reach a nonprofit, HUD-approved counselor through HOPE NOW, a cooperative effort of mortgage counselors and lenders to assist homeowners.
  • The Controller of the Currency’s consumer information site for banking-related questions is www.helpwithmybank.gov

Source: Controller of the Currency (04/21/2009)

By the way, check out this site of George Adamson, The man who lived with the lions:

Thinking About Buying a Home? How’s Your Credit Rating Affecting Your Chances?

house-with-key 

The lender wants to make sure that when they loan money to a you, that they are lending the money to someone who will pay them back. So when you apply for a loan, the number one thing they look at is your credit score. I know, that’s a twist from the roaring 2005-2007 years. I remember selling real estate in Grass Valley, Nevada City where the main criteria of the banks to loan money was that the buyer was breathing. 

Anyhow, a lender considers several factors about a buyer’s credit-usage behaviors. The system they use is a called “Tri-Merged Residential Credit Report” and is quantified as a scoring system called F.I.C.O. (Fair Issac Company). There are three companies who prepare credit reports and each one seems to come up with their own F.I.C.O. score. Different lenders use different methods, but most wind up using the middle score of the three credit reports. Others merge the reports as mentioned above.

Listed below is how the F.I.C.O. scores are generally interpreted:

• Scores range from 300 to 850.

• Score under 600 – will most likely need to use loan programs that are not F.I.C.O. driven. Represents extreme concern for underwriting and may result in additional fees, higher rates and/or points, additional down payment required, or even non-approval.

• Score 600 – 620: The underwriter will need to carefully review the application and may result in more fees, points and/or lower loan-to-value ratio.

• Score 620 – 660: This is considered a cautious risk although the buyer does stand a good chance of getting the loan provided he/she can explain any derogatory notations (i.e. late payments) in a plausible manner.

• Score 660 – 680: This is a standard automated approval score.

• Score 680 – 699: This is considered a very good risk by the lender.

• Score 700 – 719: This is considered an excellent risk by a lender and is pretty much a “slam dunk” for approval.

• Score 720 & above: This is considered “Accept Plus” for automated underwriting.

To determine the borrower’s credit score, most lenders apportion weights as indicated to the following factors:

• Timely payments – 35%
• Total debt – 30%
• Length of credit history – 15%
• New credit inquiries – 10%
• Amount/type of credit – 10%

A buyer/borrower can get a free copy of their credit report from each repository by mail or online at various websites offering “free credit reports” . I do not endorse any of them.  You should review your credit report once a year, as they often have inaccuracies and old derogatory notations that should be removed from the report.

However, you will find that most sites offering “free credit reports” do not give you your F.I.C.O. score and try to trap you into paying for an ongoing credit monitoring program or you have to pay to get your score, the report is free, the score is not.

According to CNN:

“Thanks to the Fair and Accurate Credit Transactions Act, or FACT Act, enacted by Congress in 2003, consumers can get one free credit report a year from the three major agencies – Equifax, Experian and TransUnion. But that doesn’t include scores, which come at an added cost of around $6 to $16. That’s the “fair and reasonable” fee credit rating agencies can charge consumers under the legislation.”

Here are some methods that you may use to improve your credit score:

• Dispute incorrect information by directly contacting the credit reporting agency.

• If you have any past-due debt, you can contact the creditor directly and settle the debt. Creditors are often willing to settle past-due debt for less than what is owed and sometimes are even willing to remove the derogatory notation about the debt. If the debt has been sold to a collection agency, the borrower would have to contact the agency.

• Pay down credit card balances, if possible, to less than 1/3 of the available limit.

• Work to show that you have maintained 12 consecutive months of timely payments on ALL of your financial obligations. If you have gone into foreclosure and/or bankruptcy, this will take longer; perhaps three to five years.

Refinancing? Be Careful

 

Tile mural in subway at station Plaza Italia, Buenos Aires (I'm still here)
Tile mural in subway at station Plaza Italia, Buenos Aires (I'm still here)

Along with scams to help you avoid foreclosure, which I talked about in the past, there are others out there trying to take money away from home owners in distress who need to refinance because they are facing foreclosure or those whom are just refinancing to get a lower interest rate on their mortgage.

Rule number one is that you never pay in advance to have someone help you get a loan. Some banks or lenders may require that you pay upfront for an appraisal, which can run between $300 to $450 at the most. However, my experience is that you are better off using your local bank, mortgage broker or credit unions before you pay for anything, which at the most would be an appraisal. Companies outside your home area are not familiar with local real estate conditions and you may spend several weeks or months until you find out they can’t make the loan.  I was surfing the net, looking for some information to bring you that might be of help if you are considering refinancing and the pitfalls that I was talking about.I happened to come across Attorney General’s website, Jerry Brown, and he has prosecuted some scam artists. These scammers were taking advantage of people trying to refinance by charging upfront fees of between $1,500 to $2,500 and doing nothing.  Here is part of his press release:“In November 2008, Attorney General Brown announced the break up of the First Gov scam ring. First Gov, — which also operated under such misleading names such as Foreclosure Prevention Services; Resolution Department; Reinstatement Department; and Reinstatement Processing — solicited hundreds of homeowners, offering to help them stop the foreclosure of their homes.Ring members promised victims they would renegotiate their mortgages and reduce monthly payments. They demanded an up-front fee, ranging from $1,500 to $5,000, to participate in the loan-modification program.

Victims were told to stop making mortgage payments and communicating with their lender because this would interfere with the loan modification process. After collecting their fee, ring members pocketed the money and did nothing to help victims.” 

The full text of his press release is at Office of Attorney General

By the way, talk to your mortgage company if you can, but so far they have been dumb and want you to stop making payments before they will talk to you!