The State of Arizona has filed a lawsuit against a company accused of a foreclosure help scam. According to the allegations in the civil lawsuit, the Guardian Group charged borrowers up front fees in order to modify their loans, but rarely provided the service. The Arizona Attorney general has claimed that the company misrepresented, among other things, the amount of principal reduction to be expected, that it had investors ready to purchase their loans and the amount of refunds.
Fraud in the appraisal increased from 22% of all fraud reported in 2008 to 33% in 2009, according to the Mortgage Asset Research Institute 2009 Mortgage Fraud Report. The Institute reviewed data regarding fraud in federally insured loans. Surprisingly, according to the report, mortgage fraud rose in 2009, even though the total number of new loans declined.
Mortgage fraud reports (suspicious activity reports) rose from 5% to 8% from 2008 to 2009. Arizona is now the 4th worst state in the Country for mortgage fraud. Arizona has approximately 58% more incidents of reported fraud than anticipated for the number of new loans in 2009. Fraud in the appraisal (such as selecting incorrect comparables or making unsupported adjustments) was one of the main types of fraud that dramatically rose, according to the report.
In the face of the poor real estate market, scammers are pursuing new ways of taking advantage of consumers. Most recently, there have been numerous reports of scams involving loan modifications and short sales. While there are legitimate companies, others demand relatively huge up front fees and guarantee results that are impossible to guarantee. Beware, these companies may not be legitimate and may just be taking your money. Consult an attorney or visit the Arizona Attorney General’s Foreclosure Resource Center for more information.
According to the Eleventh Periodic Mortgage Fraud Case Report to the Mortgage Bankers Association, Mortgage Asset Research Institute, LLC 2009, appraisal fraud was the third highest type of mortgage fraud in 2008, right behind fraud in the application and misrepresentations in tax return/financial records. Almost 25% of the mortgage fraud cases reported for 2008 involved misrepresentations in the appraisal. Appraisal/Valuation fraud was involved in 22% of the mortgage fraud cases reported for 2008, as compared to 19% for 2007 and 16% for 2006, according to the report.
In April 2010, the Mortgage Asset Research Institute issued its 2009 mortgage fraud report. The report gathered and analyzed various sources of data primarily regarding mortgage fraud in connection with federally insured loans. The statistics show a continued rise in mortgage fraud, even though less loans are being originated. [Read more…]
Berk Law Group, P.C. filed a lawsuit for its clients against the sellers and their real estate agent for failing to disclose that the property was used to breed and kennel large numbers of dogs. The problem was discovered when the buyer’s daughter and grandson suffered severe allergic reactions to the home.
The Court found for the firm’s clients, and concluded that the real estate agent was 95% at fault and the seller was 5% at fault, and awarded the buyer the payment of $60,000, representing the difference between the purchase price and the value of the property at the time of close of escrow, plus attorneys’ fees.