Real Estate Articles
REALTOR®: DRE Commissioner Warns Against Loan Modification and Foreclosure Scams
DRE Commissioner Jeff Davi is pictured here with (left to right) FAREPA -Santa Clara County Chapter President Wilma Baltar, and SILVAR Past President Leannah Hunt and President Julia Truesdale Keady, who represented SILVAR at the meeting.
If there's one piece of information California's Department of Real Estate Commissioner would like real estate agents to take back to their clients from his talk last week, it's the warning against loan modification and foreclosure scammers. They are the looters of today, he said.
Jeff Davi was the guest speaker at the May luncheon meeting of the Filipino American Real Estate Professionals Association (FAREPA). "As in any tragedy, you have looters. It's happening everywhere in the state. The looters today are the loan modification and foreclosure scammers," warned Davi. "These people are out there. Not all are licensed; many are rogue operators."
Davi made it clear: Unless you are a real estate attorney, you need to have a real estate license to do a loan modification in the state of California. Also, any contract requiring an advanced fee needs to be pre-approved by the Department of Real Estate. The DRE Web site has a list of over 400 approved companies with advanced fee agreements.
"What's happening these days is a real ugly thing," Davi said. "People preying on the troubles of others are seeking advanced fees, promising to process a troubled homeowner's loan modification, and it turns out to be a scam. These bogus operators have already skimmed $3 million in illegal advanced fees from homeowners."
"Please tell your clients do not give anyone money up front," Davi continued. "These are hard times and there are many people out there taking advantage of the situation."
According to the DRE commissioner, due to the housing market downturn the number of real estate licensees has been dropping at a rate of about 1,000 a week. There are now 524,000 real estate licensees in the state of California, down from 549,000 last year. He expects the number to drop further to 475,000 by the middle of next year.
Since there are fewer licensees and more agents are now renewing their licenses, scheduling exams and processing other licensing matters online, Davi has been able to shift division staff to enforcement. So far this year, the DRE has been assigned 3,376 enforcement cases; it is openly investigating 584 cases involving loan modification companies.
Davi indicated the federal government has stepped up efforts at consumer protection and reducing fraud with the Secure and Fair Enforcement ("S.A.F.E.") Mortgage Licensing Act which, among other things, calls for a national mortgage lender data base. Davi said it's a "great law," but is doubtful California would be able to meet the July 30, 2009 deadline.
The DRE commissioner repeated part of the DRE's mission is to protect the public in real estate transactions. He stressed his department is very much complaint-driven.
"I encourage people to report any violation to our department. Go online and file a complaint," Davi said. "The hardest part is we can't undo what's happened to those people. It's a terrible situation, but we have got to stop it."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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