California Real Estate Fraud Report

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Attorney General Brown issues warning about short sale fraud

California Attorney General Edmund G. Brown Jr. today issued a press release that warns of a rise in short sale fraud.

Just as the federal government’s program to encourage banks to extend distressed homeowners loan modifications spawned an entire, mostly sordid, industry of loan modification consultants and foreclosure consultants, the new HAFA initiative (Home Affordable Foreclosure Alternatives Program) is proving to be a magnet for individuals claiming to be “short sale negotiators”.

Says Brown: “While short sales can provide homeowners with a last-ditch alternative to foreclosure, this market is rife with scam artists. Homeowners and buyers, agents, and lenders should beware of short sale negotiators who operate without licenses, use straw buyers or charge illegal fees.”

As a note, I believe a lot of the short sale fraud being perpetuated involves crooked real estate agents. One such agent who worked for Coldwell Banker is Sergio Natera, who was prosecuted and pleaded guilty in Connecticut to defrauding Regions Bank in a short sale fraud scheme in which Natera flipped a property he had purchased through a short sale to the higher bidder on the property. Read the press release by the U.S. Department of Justice in which Sergio Natera’s plea is described.

Brown’s press release states the the California Department of Real Estate (DRE) is currently investigating more than 40 complaints of short sale fraud, whereas there were none just three months ago.

Consumers: use common sense when hiring people to assist you. Like any real estate transaction, your “negotiator” should be licensed. Ask for the license number, look it up, and make sure that the license and the person are one and the same. Also, never, never pay upfront fees to parties unless they have an advance fee agreement registered with the DRE.

Read the press release from AG Brown’s office.

© Copyright 2007-2018 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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