FHC Presentation

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

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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” 

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Fill out completely and return with ALL documentation Give us time to investigate your case