How you and your customers can avoid Mortgage Frau

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Information about How you and your customers can avoid Mortgage Frau
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Published on March 3, 2008

Author: tonyaengland

Source: authorstream.com

There is NO right way to do the wrong thing!:  There is NO right way to do the wrong thing! Nancy B. Hogan, CIPS Managing Broker Coldwell Banker Real Estate WELCOMEAbout Nancy B. Hogan:  WELCOME About Nancy B. Hogan Licensed in Florida Since 1978 Realtor Associate of the Year Realtor of the Year 2005 Chairman of RAMB – 1994 - 1995 FAR District VP 1995-1996 Appointed to FREC 2003 Chairman of FREC 2005-2006 Managing Award Winning Offices since 1989 Nancy does not speak for..:  Nancy does not speak for.. THE DBPR – Department of Business & Professional Regulation Coldwell Banker Residential Real Estate Florida Association of Realtors Florida Real Estate Commission State of Florida I JUST LOVE DISCLOSURES! ABOUT FREC - Structure:  ABOUT FREC - Structure DPBR – Department of Business & Professional Regulation Secretary, Ms. Holly Benson DRE- Division of Real Estate – Mr. Thomas O’Bryant, Director Commissioners – 7 of which 2 consumer members Monthly Meetings - Taking Government to People Filing a Complaint:  Filing a Complaint MyFloridaLicense.com Go to File a Complaint You can file anonymously If you know of a problem or violator of the law - you are just as guilty if you are not filing a complaint. It is our profession – WE NEED TO PROTECT IT!! PROCESS AFTER COMPLAINT FILED:  PROCESS AFTER COMPLAINT FILED Complaint Filed Investigation Probable Cause Informal Hearing Formal Hearing Stipulation No Right Way to Do The Wrong Thing!:  No Right Way to Do The Wrong Thing! NEVER initial or sign a contract for a Client Never sign a gift letter for your Client to get a mortgage Turn in escrow to your broker NEXT business day Get your agency forms signed and kept in file Keep receipts for cash delivery Don’t lie on your application – Eventually your lies will be caught Report your felony arrest in a timely manner after conviction Do your continuing education before you renew your license Make sure your license is active before practicing real estate- Check “myfloridalicense.com” Deliver a copy of your listing agreement to the client signed within 24 hours after signature Do not pay unlawful kickbacks DISCIPLINARY GUIDELINES Florida Administrative Code 61J2-24:  DISCIPLINARY GUIDELINES Florida Administrative Code 61J2-24 Fines $5,000 Suspension Revocation Education You can look at the recommended range of penalty under Code above. (61J2-24) FREC AUDIT:  FREC AUDIT I HAVE A HANDOUT FOR YOU THAT COVERS PRETTY MUCH EVERYTHING! Q&A AFTER WE GET THROUGH THE HOT TOPIC OF MORTGAGE FRAUD A BIG PROBLEM TODAY…..MORTGAGE FRAUD:  A BIG PROBLEM TODAY….. MORTGAGE FRAUD It’s Everywhere and that is why I took A special interest in finding as much about it as possible. STEPS I TOOK TO EDUCATE MYSELF… Spoke to FBI Spoke to Financial Services – State Spoke to Economic Crimes – Miami Dade ARELLO – Information Mortgage Fraud Blog Met with Fred Kerstein of the State Attorneys Office Met with RAMB to organize Mortgage Fraud Task Force WHAT IS MORTGAGE FRAUD?:  WHAT IS MORTGAGE FRAUD? Each Mortgage Fraud Scheme has some type of “Material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase or insure a mortgage loan.” SO WHAT? :  SO WHAT? Chapter 475, Florida Statutes Section 475.25 – Discipline If licensee is guilty of fraud, misrepresentation, concealment, or Has aided, assisted or conspired with another engaged in such conduct, or Formed an intent to engage in such misconduct Regardless of damage, loss or restitution…. SO WHAT?:  SO WHAT? The Florida Real Estate Commission May: Deny license Suspend license Revoke license Fine licensee up to $5,000 Reprimand licensee all of the above A FLORIDA CASE:  A FLORIDA CASE Do you know Mary Bolan? CONVICTED: November 30, 2006:  CONVICTED: November 30, 2006 Mary E. Bolan, 46, former mortgage broker and Licensed Real Estate Broker, Bradenton, Florida, was sentenced to: Six months in prison Six months home detention Three years supervised release Pay restitution of $1,782,019.47 INDICATORS OF MORTGAGE FRAUD:  INDICATORS OF MORTGAGE FRAUD Offer substantially higher than listed price – overage to 3rd party Cash payment terms in contract addendums only Buyer or their agent unusually insistent on certain lender, appraiser, closing agent Substantially higher commissions or bonuses to be paid to Agents and/or Appraisers MORE INDICATORS:  MORE INDICATORS Buyer or their agent seem disinterested in the property Buyer is unusually passive in the transaction Buyer is out of state holding company False Statements concerning owner occupancy Earnest Money Deposit Check is not drawn from buyer’s account Party asks you to take property off MLS (READ SAMPLE) COMMON SCAMS- Let’s Talk!:  COMMON SCAMS- Let’s Talk! Earn large Assignment FEE Straw Buyer Asking you to take the property off the MLS or cancel so it does not show up anywhere. WHY DO YOU THINK THEY ARE ASKING THIS? Changing the Sales Price right before the closing - So the seller is packed and ready to go! Double recording – GAP period What are the Schemes?:  What are the Schemes? Property Flipping Silent Seconds Straw Buyers Backward Applications Inflated Appraisals IM SURE THE CREATIVE FORCES WILL COME UP WITH SOME MORE IDEAS! REAL ESTATE LICENSEE INVOLVEMENT:  REAL ESTATE LICENSEE INVOLVEMENT According to the FBI- you can be brought into the fraud if you take the property off the MLS to accommodate the packaging of the transaction. NEVER take the property off the MLS or increase the sales price to accommodate the packaging of a transaction Deliberate Ignorance – If it sounds too good to be true – IT PROBABLY IS! OTHER GENERAL TIPS!:  OTHER GENERAL TIPS! If it sounds too good to be true—it probably is! Worth REPEATING! Never sign a blank document or a document containing blanks. This leaves you vulnerable to fraud. Don't sign anything you don't understand. Always seek assistance from an attorney. If you suspect MORTGAGE FRAUD when presenting contract – tell your seller to seek legal counsel before responding to offer. Document your file – UNFORTUNATELY – SOME attorneys are uninformed! And some attorneys may even be involved in the scam. Protect YOURSELF….document, document, document!! REMEMBER!!:  REMEMBER!! There is no such thing as a FREE LUNCH If it sounds TOO Good to be True…… It’s often better to say NO! WHERE TO REPORT:  WHERE TO REPORT Florida Attorney General Economic Crimes Division - Jim Johnson, Investigative Supervisor Office of Financial Regulation John Kneissel – Mgr 305 536-0450 Fax 305 810-1171 email: john.kneissel@fldfs.com Metro Dade Economic Crime – Sgt Richard Davis or Sgt. Cynthia Mechanic 305 994-1090 Main # 305 994-1000 Florida Real Estate Commission – Myfloridalicense.com File a Complaint Office of Insurance Regulation – Title Company issues Florida Real Estate Appraisal Board (FREAB) DFLE (Dept of Florida Law Enforcement) Vic Johnson 305 470-5500 MORE INFORMATION:  MORE INFORMATION Florida Association of Realtors® Legal Hotline - 407.438.1409 www.MortgageFraudBlog.com www.MortgageFraud.org Information Data Services www.idsnetwork.com/alerts.htm WE ARE THE PROFESSIONALS:  WE ARE THE PROFESSIONALS Earning a licensee is no more than a licensee to LEARN. We all have an obligation to EDUCATE ourselves and the consumers. IT IS OUR RESPONSIBILITY AS REALTORS ….TO BE INFORMED!! Top 10 Tips for Avoiding Real Estate and Mortgage Fraud:  Top 10 Tips for Avoiding Real Estate and Mortgage Fraud Always, always, always understand what you are signing and agreeing to, AND, always seek assistance from a skilled real estate attorney. If you do not understand something you're being asked to sign, ask for clarification and re-read the document again before signing. Ask for and check referrals and references for real estate and mortgage industry professionals. Check the licenses of the real estate and mortgage professionals with state, county, or city regulatory agencies. Make sure the people you're dealing with are 'in good standing' with the appropriate regulatory bodies.   Slide27:  3 Be suspicious of outrageous promises of extraordinary profit in a short period of time. If it sounds too good to be true, it probably is! 4. Always conduct business at either the real estate professional's office or a bank. Doing so gives you further opportunities to verify the agent or broker's professional standing, as well as alleviates pressure you may feel if someone is strong-arming you inside of your own home. 5. Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques and people who play to your emotions. Again, if it seems too good to be true, it probably is! Top 10 Tips for Avoiding Real Estate and Mortgage Fraud continued Top 10 Tips for Avoiding Real Estate and Mortgage Fraud continued:  Top 10 Tips for Avoiding Real Estate and Mortgage Fraud continued 6. Look at written information to include recent comparable sales in the area and other documents such as tax assessments to verify the value of the property. 7. Make sure the name on any documents you sign matches the name on your own personal identification card, i.e., driver's license, social security card, state issued identification card, etc. 8. Review the title history of the property to determine if the property has been sold multiple times within a short period. If so, it could mean that this property has been "flipped" and that the value has been falsely inflated either by the seller or appraiser. Top 10 Tips for Avoiding Real Estate and Mortgage Fraud continued:  Top 10 Tips for Avoiding Real Estate and Mortgage Fraud continued 9. Know and understand the terms of your mortgage. Check your information against the information in the loan documents to ensure they are accurate and complete. 10. Be cautious of any real estate industry or mortgage professional who conducts 100 percent of their business on a cell phone on the road. Upstanding real estate industry professionals almost always have an official office and telephone line. Verify this information before agreeing to conduct business exclusively via a cell phone. THANK YOU FOR COMING!:  THANK YOU FOR COMING! HOPE YOU FEEL THE TIME SPENT WAS OF VALUE TO YOU AND YOUR CLIENTS! HAVE A SPECIAL DAY!

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