Loan Modification Fraud
Many offers to rescue a home from foreclosure, which often promise to also save the homeowner’s credit, are deceptive, fraudulent or illegal. Homeowners should be especially vigilant of people who seek money by cash, check or credit card in advance of performing services, such as loan modifications. Only the actual lender may agree to a loan modification after the homeowner directly applies to that lender for the modification. Promises or guarantees of loan modifications should be viewed as highly suspicious, as the decision of whether or not to modify a loan remains exclusively with the lender.
Once a Notice of Default has been recorded, it is illegal for anyone who meets the definition of a “foreclosure consultant” (which includes licensed agents and brokers) to collect fees in advance of performing these services for people who live in their own homes. (Civil Code §2945.1).
Distressed homeowners should talk to their lender directly about alternatives to foreclosure, including loan modification and new government-sponsored refinancing programs. Free resources are available to help avoid foreclosure, including the following:
How to Report Suspected Real Estate Fraud
The Riverside County District Attorney’s Real Estate Fraud Unit will review for investigation real estate fraud related cases occurring in our County. The types of cases which will be considered for investigation by the Real Estate Fraud Unit are frauds that result from various fraudulent real estate transactions and/or schemes such as: submission of forged loan applications; fraudulent transfers of title of real property; recordation of fraudulent real estate documents; home equity sale contract fraud; and mortgage foreclosure consultant fraud.
When we receive a consumer complaint, we review all the information and the supporting documentation that is included. Note that we are ethically able to file charges only where we can prove all elements of a criminal offense, usually including specific intent to commit theft, beyond a reasonable doubt to twelve unanimous jurors in a court of law. This is appropriately an incredibly high burden for the prosecution and many cases do not meet this burden, which prevents us from proceeding.
If the complaint does not meet our criteria to open a case, we will do our best to refer you to an agency that will appropriately handle the type of matter involved. Many real estate consumer disputes are not appropriate for government action but are altogether proper for private legal action. It is generally a good idea to consult with private counsel to explore private legal remedies that might be available.
This office is not legally permitted to represent individuals in civil matters, help cancel any debt due on a contract that was signed, resolve or mediate individual contractual complaints, or obtain any other personal relief.
How You Can Help Us Help You?
A. Write or type a summary of your complaint and attach the summary to the complaint form. We cannot review your complaint without a complete concise statement of the facts. At a minimum, please include the following information in your statement:
- Tell us what happened in chronological detail and be specific. You should tag as exhibits any supporting documents and refer to those exhibits in your narrative (i.e., “We found a deed that I did not sign at the County Recorder. See Exhibit A.”)
- Tell us who you think the person(s) or company that is responsible for the loss, conversion(s) or fraudulent act – and why you conclude that.
- Tell us where (address, city and state) the incident, conversions or act(s) took place. Please include property address(es) involved in the fraudulent transaction(s).
- Tell us when and how you first became aware that you may have been defrauded. If individual(s) or a company is named in your complaint, please list exact dates of contact. If someone else made you aware of the potential crime, please include the person’s name(s), address(es) and telephone number(s).
- Tell how you know the representations were false or how you know money was misused.
- Tell us what your actual financial loss is, if known, and how you arrived at that figure. Do not include lost interest, unrealized profits or missed opportunities.
B. Documentary evidence is especially important; therefore, please include>photocopies of all documents and materials (contracts, agreements, certificates, notes, deeds, correspondences, legible copies of involved checks, front and back, escrow and/or loan documents, etc.) you wish us to review. Please retain the originals for your records.
Other helpful links:
Federal Trade Commission (The section for real estate specifically is located under the “consumer protection” > “consumer information” tabs and found in the credit and loans category) www.ftc.gov/index.shtml
California Department of Real Estate www.dre.ca.gov
Financial Fraud Enforcement Task Force https://www.fincen.gov/financial-fraud-enforcement-task-force-ffetf