Don’t Get Ripped Off by Short Sale Scammers
For struggling homeowners behind on their mortgages, the prospect of foreclosure can be a very real and very scary proposition. One potential way out of the mess is by a short sale, when the house is sold for less than the value of the mortgage and the bank agrees to write off the balance.
However, it is critical in such stressful times to make clear decisions and not get ripped off by scammers who would take advantage of vulnerable homeowners. Florida, at the epicenter of the mortgage crises, has gone after hundreds of shady businesses that have preyed on thousands of underwater homeowners.
Such was the case for Carlos Noguiera, who thought he was initiating a short sale on his house but instead found himself foreclosed on and his credit ruined. Noguiera, according to local news reports, signed over the power of attorney on his house to Sunnie Finkle and G.T. Wilson II on the promise that they would do the short sale. Instead, the pair allegedly rented out the house and pocketed the money until the bank came and foreclosed, according to a complaint in Pasco County.
Over a dozen homeowners fell for the same trick. Finkle would approach people and tell them she had a buyer ready, the complaint says, but instead turn the homes over to Wilson’s rental company.
The pair, who were married in Honduras in 2010 but now claim the ceremony was a joke, have blamed each other for the unfolding debacle. Who is actually culpable for what will be discovered via the investigation, but the lesson from the story is an important one for any homeowner looking to make a short sale.
Extra Services, No Extra Cost
Someone asking for power of attorney for a short sale should set off alarm bells — it’s not necessary. To avoid falling into that trap or any other type of foreclosure fraud, it’s important to consult with a reputable professional in the field.
“The obvious answer to me is go see an attorney,” says Charles W. Cadrecha, founder of the Florida Consumer Law Center, noting that it’s easy to discover if a lawyer has a dishonest past. “Check the bar website, see what our record is.”
Attorneys can provide extra services that lay-people cannot, such as examining a loan for legal issues, and the best part is that they should cost as little or less than other distressed property experts.
“We can get paid by the lender,” Cadrecha says. “The consumer is the one that benefits most if they realize they can get an attorney for a couple hundred bucks out of pocket.”
Florida is considered ground zero for the mortgage crises and in turn, foreclosure fraud. The state saw a massive buildup during the real estate boom and now untold numbers of homes are facing foreclosure after the owners were dinged by the recession, leaving a veritable playground for scammers who would take advantage of people at their most vulnerable.
“You’d be surprised how many people fall for this stuff,” says Cadrecha. “I’ve heard numerous horror stories.”