The American dream is to own a home, this has become so familiar and universal. Yet since the onset of the economic recession, the mortgage crisis has put the American dream of owning a home into major jeopardy.
Because the mortgage crisis is nationwide, it has impacted everyone. Yet those most vulnerable are those who are struggling to make payments due to loss of job or cut back of hours, etc. "So many people are in need of help," Pool said, that the vulnerability of so many from all walks of life, make it easier for scams and schemes to emerge.
Also, the fact that a home is a not only a major asset but a most treasured possession and necessity adds to the pressure upon homeowners in need of refinancing or loan modification. At this vulnerable point, "the fraudsters" as Pool refers to them, is where the scam or scheme likes to strike.
Even just before 2008, forms of real estate or loan fraud were escalating. Russ Banks an investigator for the San Mateo County District Attorney's Office spoke to members of the San Mateo County Association of Realtors at one of their weekly broker's tour meetings in the summer of 2007. Banks noted that the San Mateo DA's office was "facing enormous challenges as violations in the real estate industry increase."
And, while the DRE and the California Dept. of Corporations are doing all they can to help put a stop to mortgage scams and loan fraud, "we are not law enforcement," said Pool. "All we can do is alert people to be aware and encourage them to report fraud or illegal activities," he said.
While both the DRE and Dept. of Corporations can suspend licenses and impose fines, bringing culprits or "fraudsters" (as Pool likes to call them) to justice is not easy. "If they are unlicensed, tracking them down is difficult," said, Mark Leyes, speaking on behalf of the Dept. of Corporations. He also talked with the Peninsula Progress from his office in Sacramento on this timely but painful issue.
Courtesy of the California Dept. of Real Estate
Like with any fraud or scheme victims are often afraid or embarrassed that they were duped into forfeiting hundreds if not thousands of dollars. "Many people thought they were paying a fee to help refinance or adjust their mortgage, especially those loans that were due for an adjustment, only to discover later, it was all a scam," said Leyes.
Pool stressed it is very important that people know, "the major red flag in any of these scams is asking for money upfront," he said. No legitimate offer to help with loan modification asks for any fees." "There is no gray area on this, he said, if this happens, walk away and file a complaint immediately," said Pool.
"Some of these 'fraudsters' and scams reach out to people with a simple ad or an appeal is made that sounds good," Pool said.
Pool noted that even though there is no specific target of type of person in these mortgage or loan refinance schemes for he reiterated, "everybody everywhere needs help," some of the schemes to do foster an affinity to portions of the population that are extremely vulnerable.
"Those groups that do not speak English very well are at risk because shrewd 'fraudsters' manipulate their trust,” he said. “They might feign some affiliation with a church or neighborhood group that serves non-English speaking people." Many immigrants regardless of their citizen status can easily fall prey to schemes because so many are not only unfamiliar with English," noted Pool," they are also under-served by regular banking services."
Other warning signs besides charging a fee upfront is the "transferring of deed to a third party;" this is dangerous because what may happen is the homeowner is actually signing the property away to the scam perpetrators.
Pool said that it is always best for people who are approached by such offers to "check out if they are licensed." "They should be licensed," he said. The California Dept. of Real Estate asks homeowners and those seeking a loan modification of a loan to contact the department for assistance. And, if there is any offer or outlet that is fraudulent, Pool said to file a complaint with the DRE immediately. For details visit the DRE web site or call 877-373-4542.