TIPS FOR SENIORS Category
Shasta County Real Estate Fraud Cases Discussed
LOCAL GOVERNMENT, REAL ESTATE PRACTICE, SHASTA COUNTY, TIPS FOR SELLERS, TIPS FOR SENIORS
Robert Angulo is the investigator recently assigned by the DA’s office to handle real estate related crimes.
Robert spoke to a group at the Shasta Association of Realtors weekly meeting Wednesday. The real estate fraud unit has been up and running for just a few months and is already handling 31 cases. Here is a summary of cases being investigated or prosecuted:
- Property management company being operated by individual that does not have a real estate license or a trust account to handle tenant deposits and rent. This case goes to trial in November.
- Another property manager that committed grand theft, embezzlement and grand theft from an elderly person. Amount lost was reported at $40,000.
- Person creating false deeds. This person first created a deed to get the property out of his name and into the name of his girlfriend because he was incarcerated and didn’t want his neighbor, with whom he had disputes, to take his property. He later created another deed to put his name back on the property. He used false identification to get the documents notarized. This is a felony.
- Florida loan modification firm took $2,700 from a county property owner for loan modification services but did nothing. Robert found out the Florida Attorney General was already involved in prosecuting this firm so no action will be taken locally.
- Craigslist-Nigerian scam artists are using properties advertised for sale on Craigslist to create rental ads. Potential tenants are baited with really nice homes for cheap rent if they would just wire the funds to the scammer. Of course the home is not for rent and the money will be lost once sent. If it’s too good to be true, it’s probably a scam.
Robert also did a cross-check of all the property management companies in the phone book and found 8 that were being operated without a real estate licensee. In fact, most of the real estate fraud investigated thus far involved unlicensed individuals.
He also encouraged those in attendance to contact his office if anyone hears of someone being victimized by fraudsters or sees an ad for loan modification services that require an upfront fee or if our clients have strangers knocking on their door asking about the home for rent or asking them to leave because the bank has foreclosed. These are all scams that are happening here and elsewhere across the state and country.
Robert can be reached at 530-245-6350 or rangulo@co.shasta.ca.us.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER IN REDDING
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
Comptroller Warns Of New Reverse Mortgage Product
HOME LOANS, INDUSTRY NEWS, TIPS FOR SENIORS
One top bank regulator, John, Dugan, wants consumers to be aware of a new reverse mortgage loan product that bears similar characteristics to subprime loans that “fueled the housing boom and bust.” These reverse mortgages fall into a different class referred to as “proprietary products.”
The concern is the fact these complicated loans are targeted to seniors 62 years of age or older. Dugan heads up the federal Office of the Comptroller. He feels regulators need to develop new standards that will protect the growing US population of elderly homeowners.
During an address to the American Bankers Association, he remarked “While reverse mortgages can provide rea
l benefits, they also have some of the same characteristics as the riskiest subprime mortgages-and that should set off alarm bells.”
No information was provided to explain how this new proprietary product differs from the reverse mortgages offered in recent decades. Fannie Mae currently accounts for 90% of the secondary market for reverse mortgages. This government sponsored enterprise (GSE) purchases mortgages from lenders that originate the loans. Bank of America and Wells Fargo are big providers of reverse mortgages, according to a recent article published by CNNMoney.com.
Seniors considering a reverse mortgage should ask lots of questions to determine if the loan they are seeking is the standard loan product offered in years past or the new proprietary type which is the target of this warning. Typically, senior borrowers considering a reverse mortgage are required to be counseled extensively before making a decision to secure this type of loan.
Usage of a reverse mortgage should be considered a loan of last resort. If you plan to live out your life in your home and don’t need the equity for other purposes, a reverse mortgage may be a viable option. I would recommend seniors contact at least two providers of reverse mortgages to compare and contrast the loan terms and costs. Be prepared for the hefty upfront loan fees typical of reverse mortgages, usually in the $10,000-$15,000 range.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
HECM’s Help Seniors Buy Homes, Save Cash
FHA LOANS, HOME LOANS, TIPS FOR SENIORS
Reverse mortgages have traditionally been used by seniors to tap equity in
their home. Sandra Castrogiovanni, of Security 1 Lending, specializes in Home Equity Conversion Mortgages (HECM) for seniors. She addressed Realtors Wednesday touting new uses for this loan product. Seniors, age 62 or older, may want to consider a HECM if they want:
- To preserve their cash
- No monthly payment
- To qualify for a loan without any income verification
- To get a loan despite bad credit
To preserve cash, a senior may want to secure a reverse mortgage instead of paying off their new home with the cash proceeds from the sale of their previous home. The amount seniors can borrow depends on their age(s) and the appraised value of the home being purchased.
Reverse mortgages have no monthly payments-ever. In fact, the homeowner may receive a monthly payment from the homes equity. The net equity in the home is pledged to repay the HECM when the home is sold after the owner passes away. However, an extended absence for medical treatments or assisted living stay could trigger a forced sale of the home.
Since the home’s equity will be used to repay the loan, there is no requirement the borrower provide proof of income. In the event the senior is receiving monthly payments from their homes equity, the size of the payments is determined by the projected life span of the borrower(s) and equity available as security. Bad credit is not an obstacle either because the eventual sale of the property, not the seniors creditworthiness, is how the lender expects to recover their loan disbursements.
The senior can also receive a lump sum of cash to help pay for the home purchase and not receive any monthly payments. Again, the loans are set up so the senior can reside in the home for the remainder of their life. These loans are insured by FHA. Prospective borrowers will be thoroughly counseled on the ins and outs of this unusual loan. The loan fees for HECM’s are very high-over $15,000.
Here’s a few other details:
- Property must be owner occupied primary residence of borrower
- Mortgage insurance premium (MIP) required
- No seller concessions or credits
- Buyer must pay normal closing costs and seller must pay for all repairs
- No gift funds allowed to borrower
- Loan limit is $625,000 through 2009
Most importantly, use a local lender. Contact me if you have any questions.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
GOOGLE 411-IT’S NEW AND IT’S FREE!
REDDING LIFESTYLES, TIPS FOR SENIORS
Kiss directory assistance charges goodbye! Google just launched an automated directory assistance service that you can access for free from any phone. You can use voice commands or even text your request if you’re so inclined. Follow this link to a demonstration of this free service-amazing!
Here’s the link for information and a short video: http://www.google.com/goog411/
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
REAL ESTATE DEPARTMENT ISSUES FRAUD ALERT
HOME LOANS, INDUSTRY NEWS, TIPS FOR SELLERS, TIPS FOR SENIORS
Loan modification is a fertile area for fraudsters that want to dupe consumers struggling to keep their 
homes. Maria Giuriato, Real Estate Industry Liaison for the California Department of Real Estate (DRE), wants Californians to know there are only a handful of companies approved to assist homeowners seeking loan modifications. The list can be reached by clicking here:http://www.dre.ca.gov/mlb_adv_fees_list.html
If you are working with a company or individual for the purposes of loan modification charging an advance fee and they are not on this list, contact the DRE immediately.
Mrs. Giurato detailed fraud rings that are being busted across the state and even internationally. The FBI is working in concert with the DRE to locate and arrest individuals scamming consumers.
She went on to say the DRE arrested a Downey, California man who was involved in $300 million in loan modification fraud in the Southern California area. The fraud problem is so large, DRE has restructured their department and retrained staff to deal with these individuals and companies victimizing consumers under the guise of providing loan consultation services.
DRE is planning town hall meetings across the state to educate the public about the process of applying for a loan modification. Redding will not be a venue for this seminar until they visit the 10 largest cities in the state.
If you or someone you know is in need of loan consultation services, either call the lender directly or utilize one of the authorized licensees on the list at the link provided above.
Click here to see a video of one con artist tracked down by a SoCal TV station:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
TIPS FOR JUGGLING DEBT
SHASTA COUNTY, TIPS FOR SELLERS, TIPS FOR SENIORS
Many families are struggling to pay their bills considering the tough economic times and double digit 
unemployment locally. This problem is not unique to Redding or Shasta County but is affecting millions across our nation. Here are some tips for dealing with debt as detailed in a pamphlet from the FTC:
- Develop a Budget-If you are serious about improving your financial situation, an honest assessment of income versus expenses is needed. First determine your income from all sources. Then list your fixed expenses, those that occur monthly such as mortgage, car and insurance payments. Then list expenses that vary from month to month such as clothing, recreation and entertainment. Many money management tools are available at the library and online. Reconcile the income vs. expenses to determine if and where adjustments are necessary.
- If the budget is in the red, contact your creditors and notify them you are having trouble making ends meet and why. Ask if the payment plan can be modified to fit your current finances.
- Failing that, know your rights regarding debt collectors:
- Can’t call before 8am or after 9PM
- Can’t call you at work if your employer doesn’t approve of the calls
- Can’t lie, harass you or use unfair practices to collect debt
- Must honor written request from you to stop further contact
4. Credit counseling-seek out in-person counseling from a non-profit organization if you need help. Check with local credit unions, housing authorities, colleges and branches of the U.S. Cooperative Extension Service. DO NOT sign up for a service that charges high fees or pressure you to make large “voluntary donations” that ultimately only straddles you with more debt.
5. Consider debt consolidation option if you have home equity and the necessary credit score. Realize that you are putting your home up as collateral and could lose your home if you don’t make the payments. There is usually a fee for borrowing so take this into consideration too.
Bankruptcy is the option of last resort since your credit will be adversely affected for at least 10 years. Bankruptcy laws changed a few years back that encourage developing a repayment plan (Chapter 13) vs. a total discharge of debts (Chapter 7). One other change requires six months of credit counseling from a government-approved organization before you can file for bankruptcy. To access the list of approved credit counselors visit:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
CAMPAIGNS AGAINST MORTGAGE SCAMS ESCALATE
HOME LOANS, INDUSTRY NEWS, SHORT SALES, TIPS FOR SELLERS, TIPS FOR SENIORS
Last week, the California Attorney General Edmund G. Brown Jr. announced busting up a mortgage scam
that preyed on desperate SoCal homeowners. These homeowners were “ripped off for thousands of dollars” while their homes fell into foreclosure. As a result, Attorney General Brown stated “Our campaign against mortgage scams masquerading as foreclosure assistance will continue and even intensify.”
Three individuals in the San Gabriel Valley were arrested by FBI agents busting up the fraud ring. Those arrested face 39 felony counts including grand theft, money laundering, and conspiracy charges. The company’s in question went by First Gov and Foreclosure Prevention Services. Like many other scams, they promise to stop foreclosure, renegotiate their loans, reduce monthly payments, and transfer delinquent loan amounts to the renegotiated principle. They required an upfront fee ranging from $1,500-$5,000 (RED FLAG), told their victims to stop making mortgage payments (RED FLAG) and not to communicate with their lender (RED FLAG).
In one case detailed in the news release, a couple in Redlands responded to a mailing and were visited by a representative of First Gov. They were asked to secure two cashier’s checks each for $2,023.58 which represented the combined total of their first and second mortgage payments. The con artists set up bank accounts at Bank of America under business names such as “Reinstatement Department” or “Resolution Department” and asked the victims to make the checks payable to these names. The checks were in fact deposited to these accounts but were never applied to their mortgages. The couple continued to receive letters from their lenders that their home was being auctioned. Many anxious calls to First Gov went unanswered until finally getting a return call that their loan modification had been approved.
The next day, First Gov called again saying loan documents would be forwarded for signature but they needed another check for $2,023.58 to be deposited to a Washington Mutual account for the lender. Once that deposit was made, they never heard from First Gov again. They lost more than $6,000 and were informed by their lenders their loans had not been renegotiated.
The fraud ring is still in business. Their flyer is printed on goldenrod-colored paper in a yellow envelope. So far they have duped Californians out of more than $700,000. “California homeowners should be aware of the warning signs of foreclosure scams, so they don’t fall victim to these cynical schemes,” Attorney General Brown said.
Legitimate help for those in foreclosure can be obtained by calling 888-995-HOPE, a community-based organization that is available at little or no cost to help save your or a friend’s home!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
FORECLOSURE SCAMS EXPOSED-PART III
INDUSTRY NEWS, SHASTA COUNTY, SHORT SALES, TIPS FOR SELLERS, TIPS FOR SENIORS
Prior posts discussed what red flags to look for and the types of scams that are sweeping the state adding 
insult to injury for distressed homeowners. Following are brief descriptions of several scams uncovered in California detailed in an article released by the California Association of Realtors recently:
- Housing Assistanc
e Services(HAS)-Garden Grove-Marc Sheckler, Owner-targeted Orange County homeowners who received notices of default. Official looking “Fresh Start Program” letters were mass mailed offering counseling on options for avoiding foreclosure and to negotiate loan modifications with their lender(s). To sign up, homeowners pay $750-$1,250 upfront, and agree to pay additional for credit reports, “docusave” services, processing reinstatement, monitoring repayment plans, and financial education materials. HAS representatives instructed homeowners not to talk to their lenders (red flag)! Whenever homeowners expressed concern about an impending foreclosure sale, representatives reassured them that things would be worked out. After receiving numerous complaints for money paid and services not provided, California Attorney General Bill Lockyear filed a $2 million dollar lawsuit against HAS and obtained a court order to freeze their assets. - Rodriguez in Downey: From 2003 to 2005, Martha Rodriguez and others ran a foreclosure rescue scam using computerized lists of homes going into foreclosure. The defrauders offered to refinance their loans and save their credit, but what they actually did is arrange for straw buyers to buy the homes. By the time authorities caught up to them they had defrauded over 100 homeowners and amassed over $12 million. Ironically, she pulled this off while awaiting sentencing on another loan fraud scheme. In February 2007, she pleaded guilty to criminal charges for the foreclosure rescue scam and faces up to 40 years in federal prison.
- Alburez and Silva: Alameda-Sonia Alburez and Verena Silva owned several businesses such as Community Home Savers and California Home Saver Program. Just like the others, they used lists of homes in default from the recorder’s office to target homeowners in foreclosure. They allegedly told homeowners that, for an upfront fee and additional monthly payments, they could save their homes from the auction block. In reality, they just transferred a fractional interest in the home to a sham corporation. The sham corporation would declare bankruptcy, the foreclosure sale would be postponed, but as soon as the lender challenged the bankruptcy, the scam was uncovered and the foreclosure would resume. Both were arrested in Alameda County this past March.
- Hutchings-San Diego: Hundreds of homeowners were duped over a two year period in a home rescue scam conducted by William Hutchings and his cohorts. Many lost money and their homes. They targeted non-English speaking homeowners reaching victims through seminars on how to stop foreclosure by transferring their homes to his company. He claimed he could file a governmental land grant on their behalf that would extinguish their mortgage in four years. Then they could reacquire their homes form Hutchings company free and clear of any liens. Land grants were last used after the Mexican-American War in 1848 when Mexico ceded property to the US at the end of the war. One seminar attendee observed homeowners “flood to the back of the room to sign up for the program by signing over their properties and paying $10,000 upfront.” In May, 2008, Hutchings and others were arrested and face over 100 felony charges.
I have seen similar offerings in the Redding/Shasta County area. I can’t say whether they were legitimate service offerings or scam artists passing through town. To avoid being suckered by these con artists, I would recommend talking to a lawyer or accountant before signing any legal contracts or documents or paying anyone a fee for service yet to be rendered. If it sounds too good to be true, it most likely is a scam!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
FORECLOSURE SCAMS EXPOSED-PART II
INDUSTRY NEWS, SHASTA COUNTY, SHORT SALES, TIPS FOR SELLERS, TIPS FOR SENIORS
The staggering increase in foreclosures in California has created opportunities for con artists to 
perpetrate fraud on vulnerable home owners. Part I detailed red flags to be aware of to prevent being victimized. Now I would like to explain some of the new scams that have cropped up which were detailed in a C.A.R. Q & A released yesterday.
Foreclosure related scams fall into many categories including:
- Phantom Help: The scam artist offers to negotiate with the lender or provide other foreclosure-related services for a fee. In reality, the scammer performs little or no service and pockets the money. In many cases, the services provided could have been done by the owner on his or her own. This can cost the homeowner money and valuable time to make other arrangements to save the home from foreclosure.
- Bail-Out: This is where the con artist offers a ploy to get the homeowner out of their predicament. One example is a rent-to-buy scheme where the scammer promises to take title to the property, cure the default, and rent the property back to the homeowners until they get back on their feet. The homeowner is told they can eventually buy the property back. In reality, the scam artist reneges on these promises, does not cure the default, does not honor the rent-back agreement, or sells the property to an unsuspecting buyer. They might ask you to make your mortgage and/or rent payments to them with the promise they are passing the money on to the lender. Again, the homeowner stands to lose money and time.
- Bait-and-Switch: The con artist produces a document for signature saying it is one thing when it is actually something else, such as the grant deed to the property.
If these aren’t bad enough, other scams include identity theft, forgeries, property flipping schemes, loan fraud, pyramid schemes, ponzi schemes, bankruptcy fraud, short sale consulting fraud, and REO fraud. These schemes range from complex and highly elaborate to simple “We Buy Homes” or “Stop Foreclosure Now” signs posted on telephone poles along busy streets.
This is such a critical topic I will post again outlining some real life foreclosure scams exposed recently in California.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
FORECLOSURE SCAMS EXPOSED-PART I
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR SELLERS, TIPS FOR SENIORS
The California Association of Realtors (CAR) released a Q & A today focused on scams taking advantage of homeowners in foreclosure. Once a Notice of Default is recorded in the public records, it “acts as a beacon to unscrupulous people who, under the guise of offering assistance, seek to take advantage of homeowners in distress.”
As the pace of foreclosure activity in California accelerated, the con artists have kept pace targeting distressed homeowners, real estate agents, investors, buyers, lenders, tenants, and others involved in the foreclosure process.
Homeowners are particularly vulnerable to scams because of the complexities surrounding the legal, financial and tax issues associated with foreclosures, short sales, loan modifications and bankruptcies. Home ownership is one of the biggest decisions most consumers make, so losing their home creates extra anxiety that could result in one being more susceptible to a fraud artist’s tactics.
Some red flags to look for were detailed in the Q & A. If someone does any of the following, look out:
- Asks for money before providing any service
- Asks for payment in cash, cashier’s check or wire transfer
- Asks for a transfer of title or an interest in property
- Gives an unqualified promise to stop foreclosure or other assurances
- Offers to buy a home for a price above its market value
- Asks for something to be done immediately without delay
- Asks for the homeowner to give a power of attorney
- Asks for signatures on a grant deed or deed of trust
- Asks for signatures without giving homeowner sufficient time to review the documents
- Asks for signatures on a document with lines left blank
- Fails to provide copies of documents signed
- Refuses or fails to provide an oral promise in writing
- Instructs a homeowner to make mortgage payments to someone other than the lender
- Instructs a homeowner not to discuss the situation with the lender, credit counselor, accountant, attorney, family, friends, or others
My next post will outline types of scams.
530-941-7492 or 530-224-6767
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
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