Mortgage fraud highlighted in Get to Know Woodbury eventWashington County Attorney Pete Orput advised area Realtors to beware of those taking advantage of desperate homeowners facing foreclosure.
By: Riham Feshir, Woodbury Bulletin
Washington County Attorney Pete Orput advised area Realtors to beware of those taking advantage of desperate homeowners facing foreclosure.
“If these folks would channel their energy into legitimate enterprises, we wouldn’t have an economic problem,” Orput said at the annual Get to Know Woodbury event last Thursday.
The event, held at Central Park, highlighted mortgage fraud as part of the program that focused on Woodbury’s housing market and the city’s plans for development.
Orput said there have been hundreds of convictions in mortgage fraud, but it’s always difficult to get the money back to the victims.
He identified the perpetrators as recruiters, property finders, sellers, brokers, agents, appraisers and closers.
The victims, on the other hand: “Our neighborhoods, our communities,” he said.
“And that’s real people who are being hurt by this.”
Orput said the more perpetrators take advantage of those facing foreclosures, the more the entire housing market suffers.
Some of the common schemes he sees include:
-- A house is falsely appraised for higher than its true value and the extra money goes into the pocket of the scammer.
-- A perpetrator makes a homeowner facing foreclosure believe that an angel investor would own the house, while the homeowner pays them rent. The house is never properly rented out and the foreclosure process continues.
-- A homeowner scams young renters into renting their home without telling them it’s undergoing foreclosure. They move in, the scammer makes money off of their rent, a few months later they find out about the foreclosure and they’re left without a home.
-- A scammer steals a potential homeowner’s identity and applies for a loan without their knowledge. The victim is then stuck with the mortgage.
-- A so-called landlord buys a homestead, pays lower taxes, and when the market tanks, they walk away.
And the list goes on.
“It’s the worst exploitation you can imagine,” Orput said. “When I get my hands on that crook and send them to ‘Graystone College,’ there is some satisfaction. Not a lot, it ain’t going to keep your family in a house.”
Orput warned Realtors and other community members to watch out for red flags that include: lack of supporting documents, receipts, canceled checks, multiple purchases by the same buyer and the time of closing.
He said some of the scammers who talk homeowners into believing they can save their home end up sending some false legal documents that convince them they’re rescued from foreclosure.
The scammers often make thousands of dollars off of the desperate homeowner who scrapes up every penny they have, he said, and end up with nothing.
Those documents are worth reviewing carefully with someone in the industry who can verify their legitimacy, Orput added.
“The more desperate you are, the more cynical you need to be,” he said.
Orput said it’s difficult to send mortgage fraud perpetrators to prison because they’re not committing violent crime. It’s also difficult to get back any of the money they stole because by the time they’re done, they have usually used it all on attorney fees.
However, some have gone to prison under racketeering laws, in which a person is employed with an enterprise and intentionally commits property crimes.
“Being a crime victim, it angers me more than anything,” Orput said.
The Fourth Annual Get to Know Woodbury was held at the Central Park Amphitheater.
Housing specialist and Associate Planner for the city Karl Batalden also spoke at the event.
He said new listings are down 16.9 percent this year, while closings were up 14 percent. However, the average sale price of a Woodbury home was down from $257,985 to $236,038.
Although assessed values continue to decline, he said the local housing market shows recovery from 2008.
“Over the long term, real estate continues to be a good investment,” Batalden said.