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Campaign aims to stem foreclosure fraud
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LAS VEGAS REVIEW-JOURNAL
Updated: Aug. 18, 2010 | 8:13 a.m.
If someone guarantees he can stop a home foreclosure, it's probably fraud.
Take it as a red flag if that person wants to charge upfront fees and pressure you to sign paperwork or make payments to him.
And don't believe anyone who says foreclosure scams aren't real, Attorney General Catherine Cortez Masto said Tuesday at a news conference to kick off a monthlong campaign to stop foreclosure fraud in Nevada.
Her office received complaints against some 200 companies and has 14 criminal litigation files open against loan modification companies in Clark County, she said.
Foreclosure fraud has become an epidemic in Nevada, which leads the nation with one in every 71 households in some stage of foreclosure.
Masto, head of the Nevada Foreclosure Prevention Taskforce, outlined a number of free foreclosure assistance programs at the news conference, including a website from the city of Las Vegas.
"Educational outreach is so important to get materials and information out there to prevent foreclosure fraud, to talk about the warning signs," she said. "It's against the law to guarantee a loan modification. I don't want more victims coming to my office to file a complaint. There's too much of that going on."
The attorney general's mortgage fraud unit is prosecuting 51 cases with another 180 cases pending investigation. Convictions have been obtained against seven defendants, resulting in five felony convictions, one gross misdemeanor and one misdemeanor for mortgage fraud. Prosecutions have resulted in more than $270,000 in restitution paid to victims.
Masto said she's only limited by her staff of two attorneys and four investigators in prosecuting foreclosure and mortgage fraud cases.
Las Vegas Councilman Steve Ross discussed the city's new website, www.StopNVForeclosures.org, made possible by a grant from Fannie Mae. The site allows borrowers to complete a short online form and request assistance from a local HUD-approved counselor. There's also the foreclosure hot line at 229-4663 or 877-448-4692 to find an approved counselor.
"We want to do everything we can to help people hurt by this crisis to access assistance early and avoid being victimized by fraudulent businesses that prey on them," he said.
Las Vegas homeowner Dwayne Green said he's already thrown away close to $2,000 trying to get his loan modified. The foreclosure mediation process required by Nevada law is a "sham," he said.
"I'm one of the guinea pigs and I want to let the public know what's going on," Green said. "It was not even a Bank of America representative. It was an attorney with no real estate experience. He gets on the phone (with the bank) for half an hour and couldn't even get through. They just know what they'll give you, take it or leave it. Why do you need a mediator? Where's the neutrality?"
Preventing foreclosure fraud is a "daunting challenge," said Ken LoBene of the Housing and Urban Development office in Las Vegas. Nevada's foreclosure campaign is the most comprehensive approach in the nation, he said.
The Nevada Foreclosure Prevention Taskforce is made up of the Attorney General's Office; Las Vegas, Clark County and state government agencies; the U.S. Department of Housing and Urban Development; Fannie Mae; the Federal Reserve Bank of San Francisco; the Nevada Bankers Association; real estate agents; housing counselors and others.
Masto warned about promises of principal reductions, which most lenders are unwilling to do, and automatic refund scams in which the company charges $3,500 in advance, says it tried but couldn't get the loan modified, then provides a partial refund of $350 and pockets the rest.
Another scam is the "phantom investor" purchase. The company says it will pay off the bank in exchange for the deed and allow you to stay in the home and rent it until you can buy it back later. Once it gets the deed, the company sells it to a pool of investors and refuses to deal with the original owner, Masto said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
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Correction: ~551 properties scheduled for today. Of those, ~327 are still active. Although the volume is less than a year ago; these numbers are ridiculous.
Guru: You're suffering from the 'Dunning-Kruger' effect. Generalizations won't help any of this go away. The U.S. government is a 'bureaucratic democracy.' The cost of government can often be intangible in such matters. The mortgage crisis was caused by myriad factors; public and private. Calling loan borrowers idiots doesn't explain anything. I hope it doesn't make you feel any better about yourself personally. The beneficiaries hold an equal weight of fiduciary responsibility; especially when they had the opportunity for due diligence. E.g. allowing stated loans or even non-stated loans with an ARM attached that could exceed a reasonable expectation to repay. Why hasn't TARP helped those 'idiots' and reduced the foreclosures? According to my numbers, there are ~878 properties scheduled for trustee sale; just for tomorrow alone. Only a handful is likely to sell to a 3rd party. The rest will either go back to the beneficiary [a majority], be postponed [a majority], canceled [probably from bankruptcy], or be reinstated [the minority]. This time last year, the volume was quite a bit more. Has anyone found all those original notes required for 'legal' mediation? My opinion is that the government is just as clueless as the people seem on this matter.
Government started this mortgage mess (encouraging loans to idiots) and should not be involved now. Government costs too much. It is not free! These counselors carry a fancy title and hand out glossy pamplets on what people know (redundancy).
Best place to find quality quality bankruptcy info online is http://bit.ly/cpmRHo
A society of thieves cannot exist. There is no honor amongst them. They will tout the importance of money, even when all it does is float in a vacuum. Subject to the laws of the [your title for a hyper/uni-verse here]; nature abhors a vacuum. The so-called 'civilized' human race doesn't yet seem to understand that much as a whole.
There are plenty of two dollar solutions to trillion dollar problems. Unfortunately, most are counter-intuitive. Dishonor is a general business practice--from local real estate to Wall Street. Unfortunately, escaping the abyss of this 'bear' market requires full disclosure. Accounting rules and other financial practices that worked in a 'bull' market, do not apply.
A proper recovery that creates sustainability is a far sight. There must be full disclosure. In order for that to occur, it stands to reason, that amnesty would offer the maximum incentive for disclosure. With punitive measures, a society of thieves will just weed out conscientious objectors. It has been said, "If you force a man to think; he will kill you." God--please help us all.
He-he...too little...too late! Biggest Fraud...whoever created and allowed SUBPRIME MORTGAGE too happen... oh wasn't it the Banks and Lenders?
The unwary consumer got duped...fast forward and we see the banks and lenders end up with the house, property, downpayment, mortgage insurance payout etc... The B&L are not in it too lose!
Most of you lost your home beacause you couldn't afford a home to begin with. Did you really understand the finance part of the mortgage? It's the same story all over the country. Fraudulant mortgage brokers duped you. They lied about your income and you got your dream home. They got their money. You lost out. Case closed.
Jeff.Durbin. What I can see you are no better then anyone else running for office. You state personal opinion. If you have facts and proof of what your current commissioner has done post it or put it on your web site. You are not going to be elected but you are stirring the pot with your posts. FACTS AND PROOF. That is what the American public wants these days. Sounds bites are getting old.
To Roger,
Great post. I totally agree with you.
One of the worst hit communities here in Clark County is the Mountains Edge community. Home prices have fallen 77% or more in this so-called "premiere community of the southwest!" Our problems in Clark County stem from the fact that the current commissioner of district F is a licensed real estate agent and has been actively participating in real estate ventures as a commissioner! Can we say we know which side her bread is buttered on! I am a resident of Mountains Edge and a homeowner who got burnt in this community via the county commissioner approving the builder, who was deemed "too big to fail" to walk away from their commitment to more than 20k of us here in Clark County! As a candidate for this position, I can assure you, I am not a real estate agent, and I will not allow a developer to shaft the public!
Jeff "Sarge" Durbin Master Sergeant USAF Ret.