Real Estate News & Commentary

Beware of Fraud Peddling Real Estate Scam Artists, Consultants, and So Called Experts

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13 Articles Written
There never seems to be an end to the crooks and [tag]con[/tag] artist that prey upon people. I’ve been telling friends and associates for many months that I feel the bulk of the mortgage crises blame falls on [tag]scam[/tag] artist (many posing as mortgage consultants). As the crisis continues, the crooks will undoubtedly come crawling [...] View the full article: Beware of Fraud Peddling Real Estate Scam Artists, Consultants, and So Called Experts on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

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    Joshua Dorkin
    Replied almost 12 years ago
    That’s a great post, Michael. Thanks for sharing the information and the warning!
    rick marnon, mortgage
    Replied almost 12 years ago
    You summed up part of the problem, and it lies a great deal in the loan officers hands. They tried to pitch programs that paid better than others, and did not fully explain the programs to people. People that do not manage their money well should not be on an option arm. I had a close friend that wanted to be put onto that program, so I made him read some literature on it to make sure he wanted to do it. He eventually decided that for the cost he ultimately would not save much money. This deterred him and we put him on a 30 year fixed program.
    rick marnon, mortgage
    Replied almost 12 years ago
    You summed up part of the problem, and it lies a great deal in the loan officers hands. They tried to pitch programs that paid better than others, and did not fully explain the programs to people. People that do not manage their money well should not be on an option arm. I had a close friend that wanted to be put onto that program, so I made him read some literature on it to make sure he wanted to do it. He eventually decided that for the cost he ultimately would not save much money. This deterred him and we put him on a 30 year fixed program.
    Michael Creel
    Replied almost 12 years ago
    It really depends on why a person is buying a home. If it’s an investment, and you have no desire to keep it for the long haul, then the best strategy is to hold it as cheaply as you can. If you want to live in it for many years to come and make it your home, then you want to pay as little as you can to own it. On one property I put 150k down, and financed 350k; the payment for the first year was just $1,425 and went up about $150 a month each year after that. It is such a nice home I was able to rent a single room out for $850. I couldn’t have possibly held it that cheaply on a 30 year fixed. Right now, with interest rates droppping like flies, the 30 fixed is looking pretty good; I may switch to a 30 and hold the home longer until the market gets stronger. Many people signed for a interest only and didn’t even realize it. They just wanted low payments, and then when those weren’t low enough, they got behind and damaged their credit. Now they can’t refi.
    Michael Creel
    Replied almost 12 years ago
    It really depends on why a person is buying a home. If it’s an investment, and you have no desire to keep it for the long haul, then the best strategy is to hold it as cheaply as you can. If you want to live in it for many years to come and make it your home, then you want to pay as little as you can to own it. On one property I put 150k down, and financed 350k; the payment for the first year was just $1,425 and went up about $150 a month each year after that. It is such a nice home I was able to rent a single room out for $850. I couldn’t have possibly held it that cheaply on a 30 year fixed. Right now, with interest rates droppping like flies, the 30 fixed is looking pretty good; I may switch to a 30 and hold the home longer until the market gets stronger. Many people signed for a interest only and didn’t even realize it. They just wanted low payments, and then when those weren’t low enough, they got behind and damaged their credit. Now they can’t refi.
    Michael Creel
    Replied almost 12 years ago
    It really depends on why a person is buying a home. If it’s an investment, and you have no desire to keep it for the long haul, then the best strategy is to hold it as cheaply as you can. If you want to live in it for many years to come and make it your home, then you want to pay as little as you can to own it. On one property I put 150k down, and financed 350k; the payment for the first year was just $1,425 and went up about $150 a month each year after that. It is such a nice home I was able to rent a single room out for $850. I couldn’t have possibly held it that cheaply on a 30 year fixed. Right now, with interest rates droppping like flies, the 30 fixed is looking pretty good; I may switch to a 30 and hold the home longer until the market gets stronger. Many people signed for a interest only and didn’t even realize it. They just wanted low payments, and then when those weren’t low enough, they got behind and damaged their credit. Now they can’t refi. Reply Report comment
    Roger Williams
    Replied almost 12 years ago
    Hi Michael, Great post. Very interesting to see the details of this stuff. I would also say that borrowers need to be just as careful with the big boys too. I see many loans originated by Wells Fargo, BofA, WAMU, etc that shouldnt have been written or that were not fully explained to the borrower at closing. As always ‘buyer beware’. Roger
    Andrea
    Replied almost 12 years ago
    I know of a Real Estate Agent/ Mortgage Broker and so called credit repair consultant. The last one of which he has no license or real experience in either profession. He preys on Old people, rich people,anyone of means. He starts talking about Real Estate and mortgages and ends up with. \”I\’m a sports consultant\”. He poses as that both in Vegas and in the Clearwater, Tampa Bay area. Be very aware of a person named Tom J. working for a company with the initials KW. If you check the Tampa Bay area MLS service you will find that he is a licensed realtor and mortgage Broker but has sold maybe 1 home in the last five years and has closed just a tad more mortgages.
    Allen
    Replied almost 12 years ago
    I have also been telling friends and associates for many months that I feel the bulk of the mortgage crises blame falls on scam artist (many posing as mortgage consultants), and the other posing as real estate agents!! Increasing sale price values of neighborhoods for that all mighty commission that they might miss out on and if the value of property is listed too low then they purchase the property from the seller to then in turn resell at a higher price. Have you ever noticed the initial crime seems to be thought up on the west coast and then prefected on the east coast (Florida were the average home is upside down $100k per Chase in house figures)? Is this crooked mortgages specialist or crooked realtor? Maybe a combination of both?
    Michael Creel
    Replied almost 12 years ago
    I’m certainly not going to claim there are no crooked Realtors in the world, but a majority of your crooks prefer to be unlicensed realty “investors”. The license carries much oversight, fiduciary obligation, and legal repercussions for fraudulent activity. An agent must carry his license with a Broker, and that Broker must carry a hefty insurance bond. Brokers must keep records on all transaction for 3 years in their office files and are audited fairly frequently. So as you can imagine, if your out there doing shady real estate transactions and victimizing people, that’s not really an ideal way to go about it. The mortgage officers had no such oversight, and anyone with a heartbeat could write loans for a broker. Statistically, most mortgage fraud has been committed via FSBO’s due to the lack of oversight on that type of transaction. Most crooked deals are closed by attorneys because they are not required to be licensed escrow agents. Your big name escrow companies such as Ticor, Talon Group, and Chicago Title, etc. are pretty on the ball and will not let shady deals pass through their office.
    Steve
    Replied over 11 years ago
    I’ve seen some of this in my real estate career. I have a real estate institute in New York. The best thing for consumers is to find an agent they trust.
    Michael Creel
    Replied over 11 years ago
    They will always be around, but they’re having a feeding frenzy on this mortgage crises. Credit repair and foreclosure specialist are popping up everywhere.
    Thomas Bartke
    Replied about 10 years ago
    Michael: This is a great post! Thanks for sharing! I continue to run into frustrating experiences with scam artists. It seems like whatever you try to put together a win-win deal with a seller and/or buyer as an investor, there is already a scam that “beats” our solution in a one-up-man-ship way. The next wave in this seems to be “mortgage elimination” scams… Best, Thomas .-= Thomas Bartke´s last blog ..Instant Investor Cash Cycle – FREE Webinar =-.