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Foreclosure scams in ethnic communities.

A substantial portion of my client base is Non-English speaking because I am bi-lingual. But as one navigates through the ‘ethnic” markets, one learns of the high number of abuses and fraud that is prevalent in these markets. Especially so, during economically difficult situations like now, when opportunities arise for those who want to take advantage of the less informed and more vulnerable segment of our communities.

It is ironic, as these homeowners facing difficulty come to the “ethnic” service providers because they fear being taken advantage of and feel their “own community” will treat them more fairly. And this is probably a true statement for the most part, but there is a segment in these communities that prey on the less informed and those who need help.

So here is one thing that I feel a need to inform these communities: if you received a NOTICE OF DEFAULT from your lender, DO NOT PAY UP-FRONT FEES TO ANY ‘FORECLOSURE SPECIALISTS” OR “FORECLOSURE CONSULTANTS who claim they can stop the foreclosure. And don’t be fooled by those who say they will provide a full refund if they cannot stop the foreclosure; it is too late, you already gave them your money, getting it back will be much harder.

Because a notice of default frightens homeowners, they are often in a panic mode and are led to believe that they have to pay someone to stop the foreclosure. This is often just the opportunity that scammers are looking for. Homeowners in default will miraculously receive phone calls or mails because these scammers can buy lists of people who received notices of default. Here is a list of what “foreclosure specialists” can and cannot do. Beginning next month, all “mortgage consultants” must be registered with the State Attorney General and must also put up a $100,000 bond.

For children and grand-children of Non-English speaking homeowners, if your loved ones are having difficulty paying their mortgage payments, share this information with them, just in case they get a call from someone speaking their language, willing to help them out of their foreclosure situation because the “consultant” heard they received a notice of default.

Steve Mun, Silicon Valley Realtor

www.stevemungroup.com

Steve Mun, e-PRO®, QSC®, CDPE®
www.stevemungroup.com
www.sanjoseshortsaleagent.com
650-605-3188

Cal Dre#: 01358433

Ask me about my Foreclosure Prevention Program

Posted by Steve Mun, e-PRO®, QSC®, CDPE® (650) 605-3188 on 06/22/2009 10:36 PM

Comments (45)

scam, ethnic communities, foreclosure consultants, up front fees, notice of default, personal crusade, short sale agent san jose

This post has been included in California Information Santa Clara County, CA Information

45 Comments on Foreclosure scams in ethnic communities.

JUN

Isn't every community an "Ethnic" Community???

Affinity fraud has always been alive and well... and it is truly low. It isn't just ethnicity, but anything that a scamster can use to lower the guard of their prey.

The bottom line is that just because you speak the same language, live in the same community or go to the same church, the other person may not be looking out for your best interests.

Your comments are very relevant. It is not just in ethnic communities. People committing fraud target people that will feel comfortable with them. It happens in churches and other houses of worship. I think the language barrier really builds isolation, and that may make the problem worse.

While most areas are a large combination of cultures there are still the most segregated areas in the USA - for example Chicago, Illinois. West Side, South Side predominantly black/latino/asian (near south = asian) the North Side is mainly white. There are pockets here & there, but still one of the most segregated cities in the USA. Professionals looking out for their clients is always in demand. Not all neighborhoods are mostly Spanish Speaking. I love when we are bringing race out in the open as we definately have different marketing strategies based on socioeconomic backgrounds. Great blog & forum. Love activerain!

I agree that these type of behaviors are not limited to ethnic communities. This economy is really showing us that crooked people prey upon those who are desperate...regardless of ethnic background. It's a sad fact.

Steve: It is a shame that some people will go to the extremes to take advantage of others... Great information

It's very sad that people target certain minority and/or international communities to prey on these unsuspecting people. Karma will come around to bite them in the butt!

JUN

Very good advice about not paying any up front fees, but I'm not sure the scammers are any more or less prevalent in certain ethnic groups.

What do you mean by "ethnic communities" Like the old Irish neighborhoods in New York?

Very good advise Steven, you are right, it is ironic that people come to "experts" in their own community for advise only to be taken advantage, instead of receiving honest assistance.

Diego

Thank you all for your thoughtful comments.

Ethnic communities can be any community, but what I was specifically referring to are communities where there may be language barriers which may further contribute to potential fraud. I was saddened because I keep hearing from some of my clients who do not speak English well, being solicited by these types of individuals.

The post was written more for consumers to warn them of requests for up front fees. People were lulled into a false senses of security because these scammers were promising full refunds; but once they get their hands on your money, getting them to return it is another painful adventure.

Steve,

This is a sad and unfortunate state of our human experience. It's not just foreclosure specialists or loan mod company either....alot of the loans were also done in this exact way,especially in predominately Hispanic communities here in So. Cal. They went to the people who they thought they could trust in their own community but ended up losing everything. Sad indeed.

Great post!

In most cases the call to the lender can providethe best information. Too bad they are afraid to call the lender or the customer service is so poor they feel they have to go to someone outside of the lender.

Good advice and we see the same thing in our communities.

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I have also seen it with people who are especially vulnerable. Someone I see at the cosmetics counter at Nordstrom was telling me about how she was going to have her loan modified from this company in California through an offer they sent in the mail. Her husband had lost his job, and they were having problems making their mortgage payment. This company told them that for $3,000 they could get their loan modified. They paid the $3,000 up front - half in cash and half on a credit card. The "company" also told them that they should not pay their mortgage for 2 months - that this was the only way that they could get their loan modified. I was appalled - that they would be so gullible to do this, Again, both this person and her husband are immigrants who do not understand the system in this country. But the fact that there seems to be no government agency who can step in and stop these scammers is really the crime. It is interstate, so it should be something that the FBI is involved with, but I haven't heard of any government or media crackdown on these vultures. I guess if they can't stop Enron and AIG and the big time crooks, they can't stop the little ones either.

Steve...

"own community" will treat them more fairly. And this is probably a true statement for the most part,"

Why would that be an inherently true statement?

It's disheartening that people (scammers) feel the need to prey on anyone who is in financial distress.

Thank you for your well written article. As a Bilingual agent working with diverse population especially Hispanics I often hear of these type of abuses and scams. It happens more among those who speak limited or not English at all than those whose first language is English. We see hard working people who trust others. As professionals who care we need to be the voices of those who need us.

I have seen this happen to a neighbor in trouble, they were too embarrassed to tell people they knew that they couldn't make their mortgage payments so they paid and lost upfront fees with a company who could "help" them negotiate with the bank. I also ran into a couple who paid $5,000 upfront to list their home. It had been on the market for over 200 days and the agent had not even come out to put a lockbox on the door. People who are vulnerable and less educated on these topics are at risk. It makes me sad. As honest, caring professionals it is our duty to help guide them as much as possible.

Heidi Delvenne, Florida Properties For Sale

I agree whole-heartly on this front. I speak fluent Spanish and find this also in the Hispanic community. They prey on their own because they know that they tend to be more trusting due to the language barrier, fear of the situation they are in, etc. Sometimes, we are unable to help them because they have been so convinced of what they are being told.

It is unfortunate that there are people out there that make a bad situation even worse for the cause of just enriching themselves. It affects everyone because in the end we all end up paying for it in one way or another and creating a bad image for all of us.

Unfortunately, the same predators that are now "helping" ethnic groups to get out of foreclosure situations might also be the same people who helped get them into these situations. Case in point: A couple looking to pull equity out of their $300k townhouse was referred to a realtor who spoke their native language by the loan officer who spoke their language and they ended up buying another larger property, leaving them with option arm first mortgages + second mortgages on both properties for a total of just over a million in debt. He's a mechanic making 30k a year and just lost the larger house ( he was able to negotiate a short-sale on his original home).

This is not a new phenomena.

Steve,

Great post here. I will agree with Long and Foster Realtors above about the prevalence of this in the Spanish-speaking community. A good amount of my business comes to me because clients are apprehensive about dealing with native Spanish speakers for fear of getting scammed. Looking in from the outside I find the are reassured by being able to communicate with someone in their own language who is not from the same background. I imagine that this is common in other communities, too, where because of the prevalence of ethnic-on-ethnic fraud, ther are more challenging trust hurdles to overcome. I hope more people will read and benefit from your article in avoiding these problems in the future.

Dan

Good post, except this applies to all communities.

This does apply to all communities but if you go through short sales and foreclosures in Prince George's and Howard County Maryland, you will see predominantly African and Hispanic names on the tax records. The percentage is way out of whack with overall home sales and these are the people who were put in option arm loans that are now ballooning. There is no reason why someone who is making $15/hour should be borrowing $500k for a home. People who are not originally from the US do tend to trust "their own" which is just human nature. I lived in Korea for 7 years and that is a tight knit community as well. When people from Korea come over to the US, they tend to move to the same communities, go to the same churches, stores, etc. They feel more comfortable dealing with people who speak the same language as they do and with that comes a feeling of trust. It's a shame that some professionals in these situations did take advantage of this position of trust and still are.

Steve, points well made. I agree that language barrier can be seen as an opportunity by some to take advantage of another. One other area where I have seen it is in the elderly. They are sometimes more easily persuaded by swift talkers into giving up a lot of money, and it is very difficult, if not impossible to recoup that money. We all need to keep our eyes open to these types of scemes, and it makes me think that I need to do a better job of communitcating regularly with my sphere of influence and those around me so that if something like this comes up, they'll contact me first instead of shelling out the money.

Steve, thank you for a great post. And especially on the "upfront" fees. At this time, it is quite alarming to see the "less desirable professionals" take advantage of anyone who is facing the loss of their home. I hope that most of the responders take your words of advise....and use them wisely in their own client interactions. Others who want to twist your words & get caught up in "ethnic" issues ...well, I believe they just do not get it!

Scam artists have preyed on the mis-guided, the ill-informed and the un-educated throughout history. It has nothing to do with ethnicity, nationality, skin color, religious persuasion or net worth. It is the by-product of ignorance, superstition and a human being's desire to "get something for nothing."

Good post and I hope it helps someone from getting scammed. Just because they can speak your language doesn't mean they're out to help you.

Some very good points have been made here. The bottom line is the bottom line. It is about greed, as it was stated above. When you're a thief you don't care who you steal from. It is easier to take advantage of those that are ill-informed, uninformed and uneducated (especially if they are in your own backyard). The process of buying or refinancing property is very intimidating to the average person in the first place. They are very vulnerable when they face financial difficulty and fear causes them to buy any line that sounds like it could be the answer they are looking for. Fear is fueled by ignorance (not knowing) and the greedy have made a science of how to capitalize on it.

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hey steve

like many of the responses mentioned, yes, it is happening to everyone.

like you, i'm a bilingual ko-am and i too see it in my market. two of my short sale clients went to those "foreclosure prevention specialists", and one of them did pay the charges upfront.

like her, many people who doesn't understand english tend to trust their own in trying to save their home/credit/money but end up getting hurt by them. and its also hard to prevent them from going since some of them are elders(to whom you can't say that they are wrong.. the respect issue)

i see many "consulting" companies in my area doing this sort of business and also having them try to lure realtors in the loop, offering sort of a referral if they bring in a client. this seems like the new mortgage fraud that happened couple of years back...

i told my other client to make sure the company that she went to is legitimate and that she doesn't pay any charges upfront. i hope things work out ok for her, at least

Very few people know what they are doing when it comes down to Loan Modifications or Short Sales. It's sad but true. The problem is clearly misinformation!

The California plan that allows consultants to charge upfront, even if they are registered with the state and have 100,000 usd bonds will for sure start causing more problems than we currently have. The State of Florida does not allow "consultants" to charge any money upfront unless they are attorneys and we are seeing foreclosure rates going through the roof in the last few months.

I propose a government mandatory 200 hour course with an enphasis on Ethics! There should be an exam at the end of it for anyone, including attorneys that call themselves foreclosure specialists. It should be a similar procedure to getting your real estate license.

Reflection of the times and our collective culture in the industry. Recommend support and contribute to AAREA and NAHREP associations so they can increase their outreach programs.

Thank you all for such wonderful comments and for sharing your thoughts as well. This is what make ActiveRain such a great place.

I was just tired of hearing more vulnerable people being targeted. And my intention was, if I could get the message out to their children or grand children and have them relay the message, then perhaps I could do my part in decreasing the victim pool.

Thanks again.

It never fails to amaze me that Realtors who abide by Codes Of Ethics can continue to get away with this infractions. We must help the clients by reporting such violations and keeping our profession a one which is respected by all! Any violation which is not in the best interest of the public deserves to be documented and reported to the Local and State Board of Realtors for practice violations.

Realtors owe it to themselves and others to safeguard the public and stop ethic violations from continuing. I wish everyone the best at continuing to help others during a difficult economic time and protecting the public to insure their future relationships with our industry.

Nancy Wert, GRI, CRS, Certified Distress Sale Specialist

Re/Max Realty Centre

Ethnic communities or not; this advise is for everyone. You are right that people panic and react instead of think of a solution and yes.... those "vultures" will scope up their "prey".

Good post, and I hope that you posted it in the second language that you speak, so that those you service or hope to service can read it also!

Hi Steve. I can understand partly because I am of mixed ethnicities (Caucasian/Hawaiian/Chinese/Portuguese/Moroccan) and yes... unfortunately this DOES happen in "ethnic" communities where some people prey on those whose first language is not English. Great post. Aloha, Lana

Steve, Good post. You've insprired me to write my own post about the ethnic differences I've observed taking buyers to view short sale listings.

I recently discovered an organization whose mission is to be an advocate to the working low-mid income homeowner. They offer loan programs that are specifically targeted to this group of people. Effort is made to have mortgage consultants that "speak the language" of their members. Before you let someone you know become a victim of a scam operation - tell them to check out www.NACA.com. This group of people are phenomenal and will do everything they can to help.

Scammers are in all the neighborhoods. They go where they smell the blood--and right now it is in all markets. But the low hanging fruit are those who do have access to the "system".

JUN

Great post. But I would like to respond to Charles Stallion Real Estate. You say, you are curious as to why they are not required to learn english if they are legally here. Maybe you should learn to spell before you make this type of comment. And most are here to work, they work in jobs that most people that are here legally will not even attempt to do. And, yes, they may be trespassers but they are not animals, they are human and deserve to live and breath just like you and me. And if anyone commits a crime they should be punished and PROSECUTED with an s. I believe the charge for killing someone is called MURDER, or maybe ILLEGAL MURDER, would you kill someone in your neighbors house and not get prosecuted, well then if you kill someone in my country you should.

Very good article...Unfortunately this comes as no surprise to me. Research would show that this type of "ethnic swindling" has gone on forever. Loan Mods & Short Sales are simply the product de jur. Several times in my mortgage career, I have watched groups blatantly take advantage of those who based there on ethnic reasoning's...has always happened, will always happen. IMHO unethical people come in all shapes, colors, genders& sizes...The real issue is the pure lack of education amongst the masses.

JUN

Great article, Steve. Thanks for shining the flashlight on these cockroaches. I see it all the time and it's just heartbreaking.

Hi Marie, I knew someone would take a bite, now for my point. We actually had a neighbor shoot someone that broke into the neighbors house and no they were not prosecuted because they were declared protecting themselves.

But on the other hand I had two nieces and their mother killed by a drunk driver who happened to be an illegal alien and all he got after three years of trial was deported back to Mexico and the worst part is he was arrested two years later in Texas. Guess what for DUI and guess what, he was sent back to Mexico. I don't know where he is today but I do know where my 6 and 8 year old nieces are as well as their mother.

JUL

Steve. Thanks for the warning. Difficult times brings out the worse in people, at times. Buyer beware!

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