Fraud and Foreclosures Vicki Hightower Chief Deputy District Attorney
Role of the District Attorney’s Office What we do…
Prosecute crimes Put criminals in jail Try to obtain restitution for victims … after conviction
Role of the District Attorney’s Office What we don’t do…
Save you from eviction/foreclosure Perform free legal services Get your money back Stop a fraud from occurring … until conviction.
Common Types of Fraud
Foreclosure “rescue” Loan modification “Government” modifications Lease-back schemes Bankruptcy schemes
Foreclosure Fraud
Definitions “Foreclosure Consultant” = anyone who gets $$$ for: (1)
Stop/postpone foreclosure sale
(2)
Obtain loan or advance funds
(3)
Save home from foreclosure
Exceptions: Attorneys, Licensed Real Estate Professionals, CPA’s
If You’re In Foreclosure
The Law protects you Foreclosure Consultant Law (Civil Code 2945)
Purpose: Protect public from misleading practices
Restrictions (2945.4) What they must do: (1)
Give you a written agreement
(2)
3 days to cancel
Restrictions (2945.4) What a they cannot do: (1)
Demand payment before service
(2)
Take an interest in your property
(3)
Collect fee > 10% loan amount
Exceptions: Attorneys, Licensed Real Estate Brokers
Contract Terms (2945.3) The agreement must: (1) (2) (3)
(4)
Dated & signed by you In same language used by you Say they are not taking $$ up front Have right to cancel notice
Loan Modifications Use same principles: (1) (2) (3) (4)
Written agreement Right to cancel No $$$ up front Don’t sign any deeds over
“Pay us $1000 and we’ll save your home.” “I guarantee I will save your home.” “Sign your title to us, and we’ll make sure you keep your home.” “Stop paying your mortgage.”
“Pay your mortgage to us.” “Don’t speak to your lender. We’re handling it now.” “We can get your loan legally terminated.” “I’ll explain the terms of the contract so you don’t have to read them.”
“Call 1-800-FED-LOAN.” “File bankruptcy and you don’t have to pay your mortgage.” “I work for a lawyer / broker.”
“You could end up on the street if you don’t take our offer!”
PROTECT YOURSELF
Contact your lender first Keep making your payments Research the company (nonprofit, HUD approved)
Stay away from hard sales tactics
PROTECT YOURSELF
Get all promises in writing
READ what you are signing Don’t pay up-front fees Don’t sign over title Don’t pay your mortgage to anyone except your lender
Reporting a Potential Crime Contact local law enforcement agency
Don’t believe them if they say “it’s a civil matter”
Fill out DA Special Prosecutions Complaint: Download: www.rivcoda.org/Resources/Consumer Call (951) 955-5400 – “I want a Special Prosecutions Complaint Form”
Fill out completely and return with ALL documentation Give us time to investigate your case