While there are people and companies in the business of modifying loans or helping prevent foreclosure that are licensed, legitimate, and qualified, the Department of Real Estate (DRE) advises all homeowners that you must be cautious.
- VENTURA, California – District Attorney Gregory D. Totten warned today that county residents should be extra vigilant about mortgage, forbearance, and loan modification scams as financial predators seek to exploit the current COVID-19 pandemic. As a result of the economic fallout from the COVID-19 virus, last month alone, mortgage forbearance requests increased by approximately 2000 percent. Such conditions are ripe for financial predators seeking to exploit desperate homeowners with false promises of assistance to delay their overdue mortgage payments.
The District Attorney recommends the following tips to avoid becoming a victim of this type of fraud:
- Never pay any person or business for mortgage or forbearance assistance, including the negotiation of a new, lower mortgage payment. It is unlawful for any entity to charge an advance fee to negotiate on a borrower’s behalf with a lender. Borrowers should contact their lender directly to discuss forbearance options, and never go through a third party.
- Never sign a deed that transfers any portion of home ownership to another person or entity as part of a mortgage assistance or forbearance scheme.
- Never make any portion of a mortgage payment to anyone other than your lender. Such payments are never passed on to the lender and this often unnecessarily triggers foreclosure proceedings that otherwise may never have commenced.
- Never stop making mortgage payments to your lender on the advice of a mortgage or forbearance “expert.”
- Be wary of mailed or telephonic advertisements promising mortgage or forbearance assistance. Legitimate assistance will not come to a borrower, it must instead be sought out.
- Homeowners struggling to pay their mortgage payment should contact their lender directly to learn what assistance programs may be available.
The Department of Housing and Urban Development has also announced that the Federal Housing Administration is offering various mortgage relief options for FHA mortgage borrowers affected by the COVID-19 crisis. Details are available at www.hud.gov/answers.
Finally, county residents that need further information on mortgage forbearance scams can contact the District Attorney’s Office Real Estate Fraud Unit directly at (805) 662-1750, or obtain a complaint form at the District Attorney’s website located at www.vcdistrictattorney.com.
REFAT’s Jim Keith and Tony Wold participated in a committee hearing last week that was hosted by Assemblymember Jacqui Irwin on cybersecurity. Click here to watch video
VENTURA, California – District Attorney Gregory D. Totten warned today of a fraud scheme in which individuals purchasing a home or engaging in business transactions can be tricked into wiring large sums of money to thieves. Sadly, in many cases, the money cannot be retrieved.
This scam is called Business Email Compromise (BEC). Typically, the suspect hacks into an email account to monitor communications about an upcoming real estate purchase or business deal. When the deal nears completion, the suspect will send a “spoofed” email to the purchaser that falsely appears to be from a real estate agent, escrow officer, or title agent involved in the transaction. The fraudulent email provides instructions on wiring the funds (e.g., a down payment for a house) and the consumer wires money to an account under the suspect’s control. Once received, the funds are rapidly – sometimes within minutes or hours – wired overseas or converted to cryptocurrency such as Bitcoin. Too often, these funds represent the consumer’s life savings.
Recently, the Ventura County District Attorney’s Office received reports of fraudulent BEC transactions targeting consumers in our area. A prompt investigation resulted in the return of most of the stolen funds to the victims. In one case, $358,405 of funds an individual had sent to purchase a small business was recovered. In another case, $142,770 of a down payment for a home was recovered. Quick action by consumers and investigators was essential to thwart these crimes. Unfortunately, in many cases, by the time the theft is discovered, the funds have been transferred and cannot be recovered.
Last year in California alone, over $42 million was lost to BEC scams. Fifty percent of victim losses stemmed from BEC fraud involving real estate transactions. Nationwide, BEC causes $3.1 billion in losses. The District Attorney recommends the following tips to avoid becoming a victim of this type of fraud:
- Obtain names and phone numbers from all real estate professionals – including the buyer’s or seller’s agent, escrow agent, attorney, and any other professionals that may be involved in the purchase or sale of the property – at the beginning of the transaction.
- Never wire or electronically transfer funds (including opening deposits, down payments, or earnest money) without first calling and verifying all emailed wire instructions. Use a known phone number obtained at the beginning of the transaction for this confirmation. Do not use any phone number provided in an emailed wire transfer instruction. This confirmation should be accomplished by voice, not by text or email.
- Throughout your real estate transaction, provide sensitive information only by voice rather than by email or text. Limit social media use, including location information and check-in sites, and do not discuss pending real estate transactions on any form of social media. Such information may be used to target your transaction and to better time fraudulent wire transfer emails.
- Insist your real estate professionals communicate with you using secured business email accounts instead of free email services such as Gmail, Yahoo, Hotmail, etc. Secure your own email accounts with multi-factor authentication, strong passwords, and virtual private network (VPN) services if using free email services.
Consumers who believe they have already wired funds to an unauthorized account should immediately do the following:
- First, contact your bank, in person, and demand a wire recall. Obtain confirmation that the wire has been reversed. If the transfer has been made after normal business hours, call your bank’s 24‑hour customer support line.
- Second, immediately file a fraud report with the Federal Bureau of Investigation at https://bec.ic3.gov/
- Third, submit a real estate fraud complaint form to the District Attorney’s Office through www.refat.org
In light of the pervasive spread of business email compromise activity, consumers must be especially vigilant. Once funds have been wired out of a consumer’s account, successful recovery of those funds is often impossible.
The Ventura County District Attorney’s Office is the public prosecutor for the county’s 850,000 residents. The office employs approximately 280 employees including attorneys, investigators, victim advocates, and other professional support staff who strive to seek justice, ensure public safety, and protect the rights of crime victims.
District Attorney Gregory D. Totten warned today that county residents should exercise increased vigilance against scams designed to exploit residents impacted by the Thomas fire.
The District Attorney recommends the following tips to avoid becoming a victim:
· Scammers posing as insurance company representatives may call homeowners with an option to pay an increased premium over the phone to expand coverage options for possible smoke damage, or to pay their deductible in the same manner. Insured individuals are advised to contact their insurance companies directly regarding any offers related to their insurance coverage. Only accept information from trusted sources.
· Exercise caution regarding unsolicited clean-up, repair, or construction scams. These scams are initiated door-to-door in impacted neighborhoods. They may involve demands for upfront payment or deposits, which are then pocketed while the promised work is never completed. Instead use only licensed contractors. You can verify a contractor’s license at http://www.cslb.ca.gov/. If a contractor claims necessary work is covered by your insurance company, first call your insurance company to confirm. Consider using contractors recommended by your insurance company for any needed work and obtain more than one estimate. Also consider only using contractors with a local business location.
District Attorney Gregory D. Totten warned today that county residents should be vigilant when using online listing services to secure rental housing. Such services do not typically verify that the person advertising a property is actually authorized to list the property for rent. This creates an opportunity for criminals to prey upon unsuspecting victims.
Because of the ease of listing properties online on sites such as Craigslist.org, scams are difficult to detect. An online rental scam can be orchestrated from anywhere in the world. Therefore, the District Attorney recommends the following tips to avoid becoming a victim of this type of fraud:
- Arrange to meet with the owner or agent to inspect the property prior to paying any money. If the “owner” is out of town or otherwise “unavailable” to show the property, or states the property may not be shown, you should strongly consider looking for another rental property.
- Be wary of advertisements offering a property at below market rent or at a significant discount.
- Do not pay for rent or a security deposit with cash or via a wire transfer. Credit cards may offer some protection in the event of fraud.
- Whenever possible, deliver your payment to an open and established business and avoid sending money through the mail. Request a signed lease agreement and keys to a rental property in exchange for your initial payment.
- Obtain identification from and make note of whomever is claiming to have the authority to rent out the property.
- Be wary of people who claim to be a real estate or rental agent but provide a business card without a valid California Bureau of Real Estate (BRE) license number.
- Use websites that have visible customer feedback, ratings on landlords, and a reputation for secured transactions.
- To prevent your identity from being stolen, do not provide a social security number, driver’s license number, or bank account number until you have verified the person renting a property is authorized to do so.
- If a property is advertised by someone claiming to be a real estate agent, verify their credentials at the California Bureau of Real Estate website. (www.dre.ca.gov)
- If the listing is being advertised by a property management company, such companies are also licensed by the California Bureau of Real Estate and their credentials should be verified at the California Bureau of Real Estate website. (www.dre.ca.gov)
- The best practice is to work with a licensed real estate agent or property manager to find legitimate rental properties. If an agent fails to perform due diligence and a consumer loses money as a result, the consumer may contact the California Bureau of Real Estate and may be able to seek restitution.
Victims and property owners, or agents working on their behalf, who locate an unauthorized property being offered for rent online are encouraged to immediately submit a report to the District Attorney’s Real Estate Fraud Unit via the following email address: email@example.com. Please only report suspicious properties advertised in Ventura County.
LOS ANGELES — Attorney General Kamala D. Harris issued a consumer alert today to warn homeowners about mortgage loan modification scams. The California Department of Justice has received an increased number of complaints from homeowners and has also been contacted by mortgage servicers that have expressed concern about these scams.
Scammers are calling and mailing homeowners, pretending to be their mortgage servicer or a representative from the Home Affordable Modification Program (HAMP), to offer fake loan modifications and “trial payment plans” to lower mortgage payments. These scammers may send genuine-looking letters with the logo of the homeowner’s mortgage company, the homeowner’s account number, and deceptive contact information that routes homeowners to the scammers instead of their mortgage servicer. They may also call from telephone numbers that show up on caller ID as the homeowner’s mortgage company.
As with legitimate HAMP offers, homeowners are told that their loans may be permanently modified if they make three trial period payments and follow certain other requirements. Homeowners are usually instructed to send payments via wire transfer or money order to sham addresses that supposedly belong to their mortgage company, only to later discover that they have been sending payments to scammers and have lost thousands of dollars while their real mortgage company has not received any payment during the duration of the scam. Currently, the federal HAMP and HARP programs are set to end on December 31, 2016.
Other common mortgage modification scams include:
- Illegally charging homeowners upfront fees for mortgage modification services and then providing little or no assistance;
- Falsely guaranteeing or implying that modification applications will be approved (often through falsely claiming affiliation with HAMP, other government programs, or mortgage servicers); and
- Tricking homeowners into transferring part or all of their property interests to a scammer, usually in an effort to drain equity from a property.
Homeowners should keep the following tips in mind to protect themselves from mortgage modification scams:
- Be wary of unsolicited telephone calls and mailings that offer a mortgage modification or claim to be a pre-approved modification, especially if the homeowner is asked to provide any payment or personal information.
- Homeowners who have applied for a mortgage modification should confirm any modification offers or approvals directly with their mortgage servicer to ensure that the modification offer or approval is legitimate before paying money or providing personal information.
- Because scammers may provide fake contact information, homeowners should contact their mortgage servicer using the contact information on their regular mortgage statements to make sure that an offer or approval is legitimate. If the offer or approval is for a HAMP modification, homeowners can also call the federal government’s Making Home Affordable hotline at 1‑888-995-HOPE (1-888-995-4673) to confirm that the offer is legitimate.
- Scammers often request payment by money transfer companies, including Western Union and MoneyGram, or wire transfer, and may also use a fake address for payments. Before sending a mortgage payment to any address other than what is on the regular mortgage statements, homeowners should verify that the address is legitimate with their mortgage servicer.
- In California it is illegal for any person, including real estate agents, real estate brokers, and lawyers, to charge upfront fees for loan modification assistance or services. Be wary of any individual or company that guarantees a successful result, since only the mortgage servicer can approve a mortgage modification offer. Homeowners should also be wary of any individuals who encourage homeowners to stop contacting their mortgage servicer or to stop making mortgage payments.
- Homeowners should not have to pay a fee in order to apply for a mortgage modification and can get FREE help from a U.S. Department of Housing and Urban Development (HUD)-certified housing counselor to apply for a modification or other relief. See Additional Resources below.
- To check the legitimacy of a HAMP offer or approval, report a suspected scam, or to get free mortgage loan assistance, call the Making Home Affordable hotline at 1-888-995-HOPE (1-888-995-4673) or go to www.MakingHomeAffordable.gov.
- If a fake HAMP offer or approval is received, report it to the Office of the Special Inspector General for the Troubled Asset Relief Program at 1-877-SIG-2009 (1-877-744-2009) or go to www.sigtarp.gov.
- If a fake modification offer or approval is received by mail, report it to the United States Postal Inspection Service at 1-877-876-2455 or go to postalinspectors.uspis.gov.
- For a referral to a free housing counselor approved by the U.S. Department of Housing and Urban Development (HUD), call 1-800-569-4287 or go to www.hud.gov.
- For free assistance for low- and moderate-income Californians who want to stay in their homes and maintain an affordable mortgage, call Keep Your Home California at 1-888-954-KEEP (1-888-954-5337) or go to www.keepyourhomecalifornia.org.
To submit a consumer complaint about a mortgage loan modification scam to the Office of the Attorney General, visit oag.ca.gov/contact/consumer-complaint-against-business-or-company.
 See SB 94, passed in 2009, and 16 C.F.R. Part 322
Date: March, 2011
Home Mortgage Relief Through Litigation and “Too Good to Be True” Claims Regarding Its Use to Avoid and/or Stop Foreclosure, Obtain Loan Principal Reduction, and to Let You Have Your Home “Free and Clear” of Any Mortgage).
This alert is written to warn consumers about marketing companies and others that offer and sell false hope and request the payment of upfront fees for so-called class litigation that will supposedly result in extraordinary home mortgage relief.
Date: January, 2011
Based on current trends in real estate fraud investigations, the following summary of a new version of a foreclosure rescue scam has been provided by a prosecutor in Northern California.
We have seen similar seminars and scams operating in Ventura County. One such scam has already resulted in the filing of criminal charges.
This is a relatively new variation of loan modification scam. I have started calling it the “Principal Reduction Scam”. Here is how we see it working up in Alameda County, although I’m sure their are minor variations in each case.