Editor’s note: Kolleen Kelley was named the 2012 president of the Greater Las Vegas Association of Realtors. She will take over the bimonthly column, “On the House Q&A” from Paul Bell, the group’s 2011 president. To ask her a real estate question email her at email@example.com.
Q: I have a question about loan fraud. I’ve heard about seniors being asked to sign over their home deeds to a loan modification person in order to get a modification. What should a senior look for to spot loan fraud?
–Carole S., Las Vegas
A: Thanks for asking such a good question for my first column in this space. This issue is certainly topical. As you may know, there have been many news reports lately about “robo-signing” scandals and all kinds of mortgage fraud.
This sort of fraud should not be tolerated. It not only hurts homeowners and the housing market, but also harms the reputation of our industry and our community.
Unfortunately, we’re learning more every day about how creative these criminals can be. Senior citizens aren’t the only ones being targeted by unscrupulous people who commit fraud — though I think most of us would agree that such crimes are especially repugnant when they target seniors or other people scammers believe to be the most vulnerable.
Here are some tips designed to help you recognize and avoid mortgage and loan modification fraud.
• Read everything put in front of you to sign. If you don’t understand something, seek legal counsel.
• Don’t sign blank documents — ever.
• Avoid any sort of side agreements. The mortgage lender needs to see the trail of money, and it should be spelled out in writing and appear on the final form known in the mortgage business as a “HUD 1.”
• All the documents and information involved in any sort of transaction needs to be truthful, to the best of your knowledge and to that of all parties involved.
• It’s usually a red flag when anyone requests payment in advance. Any up-front fees being requested need to be explained in writing. And a full accounting of those fees should be provided to you.
• It may seem obvious, but do all you can to deal with reputable people. To get a better idea of who may or may not be reputable, call the Better Business Bureau, the Nevada Real Estate Division, Nevada Mortgage Lending Division, State Bar of Nevada and other leading government and industry groups that are charged with regulating the real estate, mortgage, legal and other industries.
• Everything must be in writing. Avoid any verbal or “handshake” agreements that may be proposed to you.
• Understand that the term “arm’s length” means you have no connection at all to other people or parties involved in a transaction or contract.
• Never sign over the deed to a property unless you are sure your connection to that property is terminating.
• When in doubt, stop the process and seek the advice of a qualified attorney
Deanne Rymarowicz, our legal counsel at the Greater Las Vegas Association of Realtors, adds that consumers can contact the local office of the Department of Housing and Urban Development at 366-2100 or at hud.gov/local/index.cfm?state=nv&topic=offices to find a certified local housing counselor.
Find more tips on avoiding scams from the federal Comptroller of the Currency at occ.gov/news-issuances/consumer-advisories/2008/consumer-advisory-2008-1.html.
Also check out FightFraud.NV.gov, a website by the state Department of Business and Industry that provides information on various types of scams and offers tips on what to look for and links to other agencies.
Thanks again for your question. Please keep them coming. Email your real estate questions to me at firstname.lastname@example.org. I’ll do my best to answer them here throughout the year.
As always, for more information about the local housing market, buying or selling homes and related issues, consult a qualified local Realtor or visit lasvegasrealtor.com.
Kolleen Kelley is the 2012 president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for more than 30 years. GLVAR has nearly 11,500 members. To ask her a question, email her at email@example.com. For more information, visit lasvegasrealtor.com.