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Scamming The Uninformed Buyer....Buyers Be Warned!

By
Real Estate Agent with Karen Parsons-Fiddler, Broker 949-510-2395 BRE# 01494165

I am so horrified! Yesterday I got my nails done (that is not the horrible part....they look great :)) and was speaking to my nail girl. "Mary" is Vietnamese and we've often talked about real estate and the lending situation....you see, last year she lost her home to foreclosure. She had paid someone $2500 to handle a loan modification and SURPRISE...nothing happened. So sad!

Unfortunately she told me about the "Loan Mod Consultant" too late for me to help her...but yesterday she had another question.

She has a friend who is looking for a home, and has the money/credit but has become uneasy about the real estate agent. First red light is this agent is going to handle both the real estate side and the lending side....ok, many agents do....but the rest of the story was more concerning. This agent is asking for upfront "application" fees to pre-qualify the loan of $700. I told Mary that I was very concerned about this and that there is no reason to pay for a pre-qual....or anything. Also discussed the RESPA laws and that this was a violation....run from this agent.

Mary then told me that her friend had wanted to change agents since he hadn't taken them to see any homes yet, but wanted money and documentation. The agent told her the loan had already been "processed" and that she couldn't change anymore or she would not get a loan for 2 years.

I'm out of my mind.....I spent a manicure and pedicure emphasizing that this was all unethical and offering to find her friend a good agent in that area. I even offered to work with her myself as a favor (this is a bit out of my range). I hope they listen.

It is so sad all the scams that prey on the uninformed, inexperienced and desperate. Mary told me that no one else she knew told her this was wrong. Just makes me so mad!!!

Comments(22)

Dorothy Tanno
ReMax Realty 9 - Jackson, NJ

Karen,  This buyer should send a complaint and any written correspondence or email to the Real Estate Commission. 

Aug 22, 2010 04:54 AM
Dennis Duvernay Broker/Owner
Hillview Realty - Northbridge, MA

Scam artist are out there in numbers....we need to keep getting the message out to consumers to be aware and to work with someone they know and trust....

Aug 22, 2010 04:56 AM
Adell Forbes (REALTOR®)
eXp Realty - Atlanta, GA
"Knowledge & Experience Working for You"

All I can say is "WOW"! It even seems a bit unbelieveable that a professional would put their reputation and license on the line like this.....it's so CRAZY! Greed is a vicious vicious animal- the more you get, the more you want; regardless of the consequences.

And we wonder why most people have a bad taste in their mouth when they hear the word real estate agent. Hopefully, this person will get "called out" for their actions and have their license evoked. It would definately be one for the good guys.

Aug 22, 2010 04:58 AM
Carol Neu
Evergreen Realty - Big Bear Lake, CA
SFR, RCS-D - Big Bear Foreclosures

It always burns me when I hear about liars taking advantage of clients, when there are so many legitimate people available to actually help.  Often, it seems that people, who are from a given community, and who are selected because of their membership in that community, take advantage of the lack of awareness in the community.

Mary's friend is lucky Mary knows you.  I hope you can help her friend.

Aug 22, 2010 05:02 AM
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

I'm really just hoping that the friend listens to me....but they are so isolated and fearful that these scammers can take advantage so easily.

Aug 22, 2010 05:07 AM
Leslie Ebersole
Swanepoel T3 Group - Saint Charles, IL
I help brokers build businesses they love.

Oh crap. I want to come help this gal, and it's certainly out of my range. This makes me furious. I hope she takes your advice and let's you help her find a new lender and a new agent.

Is it really typical there to have loan origination and real estate representation done by the same person? Boy, that feels uncomfortable to me.

Aug 22, 2010 05:08 AM
Jenna Dixon
Momentum Real Estate Group LLC - Marietta, GA
55 & Over | New Constructions | Horse Farms

Pretty sure that the new lending requirements that went into effect this year specifically prohibit ANY upfront application fees collected by an LO whether they be direct lender or broker...

Aug 22, 2010 05:12 AM
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

No it's not typical, but it does happen and there are many ethical people who do both.

Aug 22, 2010 05:28 AM
Tom Branch
RE/MAX Dallas Suburbs - Plano, TX
Broker, CDPE, SFR, ACRE, Plano TX Ambassador

Loan modification companies are highly unregulated and vary from state to state. Texas requires non real estate licensees to be licensed mortgage loan originators. 

Loan modifications do not close so I doubt RESPA applies. 

Tom

Aug 22, 2010 05:35 AM
Alan May
Jameson Sotheby's International Realty - Evanston, IL
Home is where the hearth is.

Unfortunately, this is exactly what the scammers are looking for... the uniformed buyer... in fact they are the bread-and-butter of their business.

Aug 22, 2010 06:03 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Karen - In any crisis there are always "vultures" that swoop in for the "easy pickings."  It's unfortunate, but there will always be those who prey on the uninformed.

Aug 22, 2010 07:33 AM
Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Karen, I wouldn't be a bit surprised to find that theagent/loan officer is maybe of the same ethnic background as these people, even though you did not mention that. I have seen these predators that take advantage of their uninformed countrymen because they feel they cannot go elsewhere. So Sad, but happy to hear that you are getting the digits all prepared for vacation.

Aug 22, 2010 08:03 AM
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

Yes Ed, you are correct.....and it makes it all the worse.

Aug 22, 2010 08:18 AM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Karen - It's unfortunate that there are still people in this business who are trying to take advantage of others.

Aug 22, 2010 08:18 AM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Karen - AAARRRGGGHHH!!!  I hate to read and/or hear about crap like this happening to people.  And we wonder why the public has such a poor image of us. 

As you pointed out, it is not illegal and/or unethical to have the same person do the loan and the real estate, except in the case of FHA.  Frankly, it happens all the time, especially now.  Having said that though, this is no reason to totally rip people off.  Thank God this buyer hasn't paid anything yet - right? 

It is because of crap like this that we all (Realtors & MLO's) must continue to educate the consumer and the public every chance we get.

Aug 22, 2010 11:43 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Karen you need to give her the phone number to you Banking Commission and have her file a complaint.  With the present Licensing Laws, they will not only put this person out of business in your State, they will not be able to do another Loan in any other State.

Aug 22, 2010 02:21 PM
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

It is unfortunate that someone that they trust would take advantage of their ethnic or cultural connection!  I hope that she takes your advice.  Keep us posted!

Aug 22, 2010 02:44 PM
Vicki Pedersen
Pedersen Real Estate - Riverside, CA
Providing Exceptional Real Estate Service

Karen, It makes me angry when I hear about situations like this. I hope that Mary's friend takes your advice and gets away from this agent.  It is so upsetting that an agent would do this kind of stuff to a "client" and I use that term lightly in this instance.  Think about the seriousness of our duties as agents to our clients. One definition of "client" in the dictionary is: "one who is under the protection of another." Think of this definition and contrast to what this agent is doing to Mary's friend. 

Aug 22, 2010 06:00 PM
Bill Burchard
3B Realty: 951-347-3818, CA - Murrieta, CA
Broker, Realtor, Representing Buyers and Sellers

Karen, my jaw dropped when I read your remark… “The agent told her the loan had already been ‘processed’ and that she couldn't change anymore or she would not get a loan for 2 years.” It’s infuriating that predators exist and will do/say anything to take advantage of their innocent/naive prey. I sincerely hope that she accepts your offer to help.

Aug 23, 2010 02:33 AM
Holly Weatherwax
Associate Broker, Momentum Realty - Reston, VA
A Great Real Estate Experience

That is awful! I am glad you were able to provide her with some solid advice.

Aug 25, 2010 12:20 AM