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.
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.
There was an overall increase in mortgage fraud reports (suspicious activity reports) of 5% to 8% from 2008 to 2009. Arizona now ranks 4th in the Country for incidents of mortgage fraud, having about 58% more reported fraud than expected for its volume of new loans in 2009. Notably, fraud in the appraisal increased from 22% of all fraud reported in 2008 to 33% in 2009.
Vigilance and diligence are the keys. Lenders should ensure that they verify and double check all data provided in connection with a loan.
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.
Berk & Moskowitz, 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. Read the Superior Court Judge’s entire deicision.
Maricopa County, Arizona Superior Court Judge Kenneth Mangum found in favor of the firm’s clients on their real estate fraud and misrepresentation claims.
Berk & Moskowitz, P.C. filed suit against the seller/developer because, among other things, its agents falsely represented to the firm’s clients that a nearby dairy was being closed. The Court found the seller liable for misrepresentation and consumer fraud, ordered full rescission (cancellation of the sale and a full refund of all amounts paid by the buyers), $15,000 for emotional distress damages and attorneys’ fees. Read the decision.
