Trends in real estate fraud outlined at summit

Paula King

Jun. 24, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- ANTIOCH -- A panel of real estate experts on Wednesday outlined the scams spreading through the market as more people fall victim to fraud while obtaining home loans.

"It is a problem, but it is very difficult to prove," said Terrence Christopher Patterson, of the state Department of Real Estate.

About 60 real estate professionals gathered in downtown Antioch for the Contra Costa County Real Estate Fraud Summit.

Many homeowners are looking for relief from the foreclosure crisis, but a majority of the panel agreed that those seeking loan modifications should pursue free assistance instead of paying mortgage consultants who may charge high fees without real results. Homeowners should be wary of consultants who ask that deeds be signed over to them.

Patterson said a state task force is investigating and prosecuting fraudulent loan modification providers. Contra Costa County Assessor Gus Kramer, who moderated the morning event at the El Campanil Theatre, said loan modifications require detailed and delicate personal finance information that can be used for identity theft.

"I have a real reservation about paying people to do my loan modification when people will do it for free," he said.

A panelist from the U.S. Secret Service said identity theft is becoming common for the credit ratings needed to buy houses. Other scams involve parties cleaning up and renting out vacant homes they do not own. The shammers disappear

after collecting that first and last month's rent and deposits.

Elaine Brooks-Cox, of Pacific Community Services Inc. in Pittsburg, said her agency sees significant mortgage fraud involving the elderly. One case involved an 80-year-old Pittsburg man who became homeless when his granddaughter refinanced his mortgage three times without his knowledge.

"Relatives and caregivers have been known to prey on the elderly," said Jack Schwartz, an Oakland real estate attorney.

Brooks-Cox advised first-time home buyers to educate themselves by attending homebuyer classes. She said they should obtain the documents early so they aren't rushed during the signing process and never sign anything they don't understand.

"This is the biggest purchase of a homeowner's life," she said.

During the discussion, Kramer came to the defense of real estate appraisers, saying many are leaving the business because of new restrictions. He added that this leads to fewer appraisers and more costly appraisals.

"Everyone wants to point the finger at the appraisers," he said. "They really are the scapegoats."

Kramer did not comment on a recent three-part Times series that scrutinized his property transactions and assessment practices, other than to note the Times currently has a property tax appeal before his office.

The Times' parent company -- Bay Area News Group -- is appealing assessments in every county in which it owns property, Times Executive Editor Kevin Keane said. Those appeals began well before news stories prompted readers to send in tips about Kramer that led the investigative series.

"For Mr. Kramer to insinuate it is a motivation is just ridiculous," Keane said.

Reach Paula King at 925-779-7189 or pking@bayareanewsgroup.com.

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