The thought of being taken advantage of by a mortgage loan con artist is quite scary. While there is no way to 100% guarantee that you won’t fall victim of real estate fraud, there are several steps you can take to help prevent yourself from falling victim.
Know Who You are Dealing With
The single best way to prevent yourself from falling victim to a mortgage scam is to know the people you are working with. Ideally, you should personally interact with everyone who is involved with the process of selling or buying your home. After all, instincts can go a long way toward weeding out the bad seeds. In addition, it is far more difficult to pull off a scam when everything is done in plain sight for you to see.
In addition to meeting face-to-face with everyone in the selling or buying process, you should know more about the people you are working with. In other words, look into the backgrounds of those who are involved with the transaction so you can be reasonably certain they are reputable.
Don’t Allow Yourself to Be Rushed
Although there are times when real estate transactions are time sensitive, such as when purchasing a foreclosure or short sale property, you shouldn’t allow yourself to be rushed through a purchase. Continue reading
I view my tent ministry as a real estate professional as an honorable job. I am helping people who are in distress get a new piece of mind. On a broader sense, owning a piece of property is part of the American dream. Sadly, there are vultures out there that want to prey on the innocent with things that sound good but are pure trouble. I recently read an article by the Department of Real Estate of California and I thought I would share a few pointers with everyone.
(Note – this is written from a California standpoint, most pointers should be applicable anywhere in the US but check with a RE agent in your area if you have specific questions.)
Does a person who helps me with a short sale have to be licensed by the state?
Yes, any person who “negotiates loans…or perform services for borrowers or lenders…in connection with loans secured directly or collaterally by liens on real property… for or in expectation of compensation” must be licensed.
What is that in English? If a person wants to help you negotiate with a lender in regards to a property – that person must be licensed. This applies to anyone who wants to talk to your lender(s) on your behalf in regards to a loan secured by property.
Application – we are seeing ‘short sale negotiators’ as a new business. If they cannot produce a DRE license number then run. Also, once they give you a license number check it out against your state’s real estate license database. Some of these negotiators hire a broker to list the property which is a licensed professional. However, if THEY talk to your lender(s) they too must be licensed. Continue reading
Real estate attorneys must be familiar with the concept of the statute of frauds. While the concept is often not applicable in business breach of contract lawsuits, the statute of frauds is something that an attorney in real estate litigation should always consider.
What is the Statute of Frauds? California Civil Code section 1624 provides that certain types of contracts are unenforceable unless they are in writing. Included in the list of contracts are those that involve the purchase or sale of property, the leasing of property for more than a year, and brokerage contracts (to sell or to lease). A corollary called the “Equal Dignities Rules” requires that when an agent signs a contract that must be in writing, the underlying agreement giving that agent authority must also be in writing. The main purpose of the statute of frauds is to prevent fraud.
What constitutes a valid written contract? There is no hard and fast rule as to what is sufficient to constitute an enforceable contract for the sale or purchase of land. Generally, the contract must identify the parties to the contract, include a description of the property so that it can be identified, and include the basic terms of the contract so that it can be enforced (including price). California law has numerous cases dealing with different situations in which contracts were either enforced or invalidated. Some cases insist that the lack of any essential terms will render the contract unenforceable while others get around this limitation by allowing oral testimony to fill in the gaps (called ‘parol evidence’).
Does the Statute of Frauds apply to my case? The statute of frauds has so many exceptions that determining its applicability in most real estate lawsuits can be a daunting task for the best real estate lawyer (but, if there is a chance that it applies, Continue reading
An article in Forbes talked about a report released by the Federal Bureau of Investigation this week stating that real estate fraud cases were on the rise. They said reports of suspicious mortgage filings increased 36% during fiscal 2008 compared with 46,700 filings the year before, and that 2/3rds of all pending FBI mortgage fraud investigations last year involved more than $1 million at a clip, putting a rough estimate of the total at $1 billion.
It’s easy to understand why people would try to exploit a bad economy to help themselves, since that’s what criminals do, but it’s scary to see just how pervasive it is. Just this week, there were four instances in four different states confirming what the FBI stated.
In North Carolina, banking regulators fined mortgage lender North American Real Estate Services Inc. $320,000 and revoked its state operating license after ruling the firm used shell companies and fictitious names to avoid state regulation. They also ordered the company to refund $60,000 in what it called “illegal” broker fees to 13 borrowers. Regulators allege the firm was engaged in a practice known as “net branching, which is where an existing mortgage company gives a franchise to another mortgage company in order to carry out its business in a particular area.” Only, in this case, all the companies were under the same umbrella. The North Carolina Commissioner of Banks’ office says it has taken enforcement actions against a number of net branch companies in recent years, with fines and settlements exceeding $1.3 million.
In Georgia, former attorney Steven H. Ballard pled guilty in federal district court to defrauding over a dozen victims in Georgia, Florida and Tennessee in a real estate investment scam. Continue reading