A DIRTY DEED

Terry and Brenda Edwards sit outside the Royal Oak bungalow they owned until they fell victim to a mortgage fraud scheme called equity stripping. Now they are tenants facing eviction on March 28.

ROYAL OAK MICHIGAN USA— Brenda and Terry Edwards wanted to take out a small home equity loan to pay back taxes.

That’s all.

Instead, the couple became targets of an unscrupulous lender who took them for all they have in a mortgage fraud scam that plays out in different variations every day in the United States.

FULL STORY
http://www.dailytribune.com/stories/031906/loc_.shtml

Ralph,

I respect your accomplishments in this business but this new crusade you are on is becoming tiresome. The fact is, we don't really know the true story behind these cases because the news media always take the side of the "Poor Victims". Quite often these people are fully aware of what they are doing.
If I am losing my house to the bank or the gov't and some guy comes along to lend me money, what are my choices? I have to pick the better of two evils. If the bank or gov't gets my property then it's gone. If I work out some deal with this shmuck then I might have a better chance with him. At least this will buy me some time. I'll take his money and sign whatever paperwork he wants me to sign. He might think he's gonna rip me off in the end but I got news for HIM. When the dust settles i'll run to the news media and cry fraud! I can say I was under duress and I had no idea what I was signing. Guess what, I keep my house and even get some cash as punitive damages and everybody feels sorry for me even though I haven't made a mortgage payment in three years!
So Tell Me, Who is Scamming who???

Ralph,

I believe I read somewhere in your book that you do pre-foreclosure buy-outs. Are you paying full market value? Do you ever let the owners rent back? And have you ever been accused of fraud?

Just curious.

Full Market Value of a pre-foreclosure is the price offered and accepted. It has nothing to do with what the 120 day on market Full Market Value is or even the 60 day financed Full Market Value.

In almost any circumstance Cash offers beat higher financed offers. On properties where their exist fixed time schedules, such as foreclosure sale dates lower Cash offers when accepted do represent the real Full Market Value.

If you do appraisal or BPO work, DOM (Days On Market)is a key factor on estimated sale price and list price. The shorter the DOM the lower the estimate sale price.

While I to tire of excessive sad stories of foreclosure, I do see that some mortgage companies appear to target less educated and those already in distress. Others make loans to unqualified buyers and interest only loans to people who do not fully understand them. Mortgage companies that specialize in equity stripping are often far to willing to provide their "services" to under qualified individuals and those who do not understand them... causing the increasing foreclosure rates in many areas and one that is expected to increase as interest rates move upward and high appreciation markets stabilize or correct.

This represents opportunities for problems for many home owners.

Your Honor, "Full Market Value of a pre-foreclosure is the price offered and accepted."

, ok i'll use that if the time ever comes, maybe he'll only give me two years plus community service

There are other options than refi or buy out for homeowners in pre-foreclosure. I think we all know that here. The hard part is convincing homeowners that there are still professionals out there whom they can trust not to take advantage of them. I've been trying to push that message for almost four years now, but it seems that the vultures still outweigh the professionals.

Yeah, I'm kinda leery of this story.

So, out of the blue, the home was foreclosed on and they knew NOTHING about it?! I don't know how it is in MI, but here the lender must satisfy certain legal requirements before the home can go into foreclosure.

I think that story doesn't detail the fact that the family had the opportunity to review the documents, received written notification that they were deliquent, received certified mail informing them of the foreclosure proceedings and foreclosure date.

It is another yellow journalist trying to capitalize on some unfortunate story.

Don't get me wrong, I think it is a sad day whenever a respectable member of a community loses a home. I don't, however, think that each time it happens, we should change the industry. In GA, predatory lending legislation designed to protect the consumer backfired and almost resulted in fannie mae/freddie mac ceasing to underwrite mortgages in the state.

We must put the ultimate responsibility on the consumer. Especially in today's society. To employ a "dumb choice police" would eat slowly away at the effectiveness of the economy and punish responsible consumers for the actions of irresponsible consumers.

It is sad but I have seen A LOT of this going on. They prey on people of hardships, stress, excess turmoil in their lives, less knowledge of the process. Anything that they can get an advantage over. They “befriend” them and are normally really smooth talkers. They make it like they are your “Best Friend” and they only want to help you. There is a (X) Lender in this area that recently received a deal he could not refuse, his room and board is paid for the next ten years or so and with complements of the US Government.

I see scams dealing with pre foreclosure properties and people portraying themselves as “Pre Foreclosure Rescuers” . Several are under investigation. (A lot of people up at 2:00 am watching the tube on “How to Buy Real Estate With no Money” aka: “How to #@%$& your neighbor out of their house”!)

When people are down on their luck they are usually desperate, and when some smooth talker comes around assuring they can help them to keep their property, it is human nature to want to believe in them. They normally don’t realize the truth until it is too late.

Local Incident:
There is a X Real Estate Agent (X Agent because the Commissioner took his license) in the area that has teamed up with a contractor. They look for properties in the city limits that can be divided and then the contractor starts calling the home owner (normally single older women) and telling them of a special for remodeling. The contractor is persistent and calls the homeowner several times a day then starts knocking at her door. Befriends the woman, tells her that he can do the job for X amount of $s. When the homeowner tells the contractor she can’t afford it, that is when he hits her up regarding the extra land. That he has a investor friend (X Real Estate Agent) and he probably would be interested in the back parcel, its too much to take care of anyway right? Makes the deal that the Investor will pay the him for the remodeling and then all she has to do is sign over the back lots to the investor.
It sounds like a sound deal Right? That is not how it ends up. The work is substandard & over charged. The investor who wanted just part of the back yard has now, by Fraud, got the owner of the home to sign the deed over to the investor. She had no idea until the investor showed up one day and proceeded to cut down 40 trees. That is when she found out that she was no longer on title, he told her he could do what ever he wanted to do. It was his property, he owned it. He even posted an eviction notice on her front door.
Should the homeowner take responsibility, absolutely but by no means a 100%. (Maybe 5%). These people know what they are doing and their full intent is to defraud the homeowner out of their property by what ever means possible. They employ four attorneys that have or rather lack the same ethics as them to try and make sure that the “Investor” at least is able to keep the back lots. In essence paying absolutely nothing for them!

I have 1st hand information on the above and it is absolutely true and it sickens me and I hope to read that this person will have a new address residing with the State or better yet, a Federal Facility.

As an agent who takes the time to go through every contract with people unrtil they comfortably understand them, I get upset that there are still so many people who sign things without knowing what it is thay are signing. Yes, this couple bears some of the responsibility for what happened by not going through everything they got. However, how many people actually understand all the legal docs in a transaction? An unethical agent/mortgage broker, etc, can easily say that the papers mean something else, in legal terms. As far as it being foreclosed and them knowing nothing about it- not difficult, as the paperwork would have gone to the owner (Bernal?). They should have received something addressed to either occupant or John and jane Doe. Do you read everything that comes to you if it's not in your name? I don't. I usually throw stuff away that say occupant, or if it has someone else's name, I return it to the PO....
I applaud the attempt to cut down on fraud- in real estate or any other industries. Don't go off the deep end and make every transaction have to be approved by some gov't agency (it'll get to that point, I fear), but crack down on the real scams. I think we, as agents, have a big responsibilty to help educate the public, instead of just trying to make money off of them. Make sure the people you work with understand the contracts they sign, explain the process to them, be avaiable and approachable if they have any questions. We may only be able to help one family ata time, but that's one family less likely to ever be scammed or taken advantage of in RE dealings.

The story does not sound credible. I think Ralph and everyone else who believe them are being duped by these people. How did the little girl being killed have anything to do with the story? They played the sympathy card so many times, I can still hear the violin music.

There are real victims of mortgage fraud out there, but these people are NOT one of them! I think THEY should be investigated.