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Category Archive: ‘Fraud’

Latest Real Estate Scam

A sophisticated scam by fraudsters hacking into realtor accounts:

There’s a consumer alert about an apparent scam targeting families in Rhode Island after a local couple lost $13,000.

Experts say this scheme is very sophisticated, and anyone who’s in the market for a new home needs to be on alert.

It’s a simple idea: pose as a real estate agent online and target home buyers. But in reality, it is anything but simple.

“The goal is to hack into the real estate agent’s email account,” said Connor Dowd, a broker with Keller Williams Realty of Newport. “Once they’re in, they try to learn about any real estate transactions that are currently going.”

News, Weather and Classifieds for Southern New England

Posted by on Oct 5, 2015 in Fraud, Jim's Take on the Market, Scams | 2 comments

Inventory Watch – Relists

There have been 116 new listings of NSDCC houses this year. As expected, 61 of those were on the market last year (53%), and that’s not counting the sellers who listed with a different company.

Why are listing agents allowed to intentionally deceive the consumer? You’ll have to ask the district attorney about that one, because there is nobody within the industry that is doing anything to stop it. Get Good Help!!

Click on the link below for the complete NSDCC active-inventory data:

Read More

Posted by on Jan 12, 2015 in Fraud, Inventory, Jim's Take on the Market | 1 comment

Potentially Distasteful?


Because California has been exempted by the IRS from their debt-tax on short sales, we should still see more of them in the coming months and years.  They tend to be shady – here’s how a case in Nevada turned out:

An excerpt:

Harcourts was one of the Northern Nevada companies identified by a Reno Gazette-Journal investigation last year for engaging in quick-listed, dual agency short sales. The deals allow the same agents or firms to earn multiple commissions on the same property by representing both the buyer and the seller — at times “triple dipping” and earning a third or even fourth commission by being involved in the property’s resale as well.

The practice also allows a pre-arranged buyer or investor to purchase the property far below fair value by blocking other offers for the property, which go pending with an approved offer the moment they are listed on the market. This allows an investor to resell the property just a few weeks or months later at huge profit, with some examples posting more than $100,000 in appreciation during the resale.

“What we pursued was gross negligence based on fiduciary duty … to represent the interests of all parties involved,” said Jonathan “JD” Decker, Nevada Real Estate Division administrator. “In this case, all parties include the seller, buyer and the mortgage lender.”

According to the defense, the primary interest of the seller is to sell a property quickly to avoid a harder hit on their credit rating from foreclosure. Since the seller is losing the property, it does not matter if the house is sold at a lower price to a prearranged buyer. By failing to get the best offer, however, Decker’s team said that the deals did not fairly serve the interests of the mortgage lender.

During the hearing on Wednesday, the defense countered that courts have ruled that the lender and homeowner are adversarial so the broker cannot represent both their interests. Instead, banks need to do their own due diligence to ensure a distressed property is being sold for the best price possible.

“You could call what was going on potentially distasteful,” Decker said. “But (the commission decided) that it did not come down to being illegal or in violation of statute.”

Posted by on Jan 8, 2015 in Fraud, Short Sales, Short Selling | 1 comment

Corruption, Lies, and Deceit

Chase Witness

Every American should read this article that exposes the cozy relationship between big banks and government – thanks daytrip for sending!

An excerpt:

One mortgage in particular that sticks out in Fleischmann’s mind involved a manicurist who claimed to have an annual income of $117,000.  Fleischmann figured that even working seven days a week, this woman would have needed to work 488 days a year to make that much. “And that’s with no overhead,” Fleischmann says.  “It wasn’t possible.”

Posted by on Nov 9, 2014 in Fraud, Mortgage Lawsuits | 3 comments

‘Control Fraud’

Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy

Here’s a fascinating story about the prosecution of people who defaulted on liar loans they obtained in 2006.

The U.S. Attorney accused of them of mortgage fraud, and the defense attorneys – some appointed by the state – made the case that banking executives intended to make fraudulent loans.

The defendants were acquitted.

Click on the link below for the full story:

Hat tip to daytrip!

Posted by on Sep 9, 2014 in Fraud, Mortgage Lawsuits | 8 comments

Cole Gets 17.5 Years


Hat tip to W.C. Varones for sending in this article on Crisp and Cole, the two real estate agents in Bakersfield who were found guilty of defrauding banks out of nearly $30 million:

FRESNO — For their roles in a mortgage fraud case that rocked Bakersfield, David Crisp was sentenced Monday to 17 1/2 years in prison while his wife, Jennifer, received what the federal judge in the case called “the break of a lifetime”: five years probation.

David, 34, was immediately remanded to custody to begin serving what amounts to the same sentence given in February to his former business partner, Carl Cole, who like Crisp had pleaded guilty to conspiracy to commit mail, wire and bank fraud. Both former principals of Crisp & Cole Real Estate and Tower Lending were ordered to pay restitution of more than $28 million.

In a news release, federal prosecutors said David had finally “crashed hard” after flaunting his “ill-gotten wealth” and going around in exotic cars, Armani suits and a private jet.

“David Crisp lived in the fast lane, steering a real estate company that was all image and no substance,” U.S. Attorney Benjamin B. Wagner wrote.

As the housing bubble burst, Crisp & Cole’s projects fell through, home defaults mounted and lawsuits were filed. By September 2007 the IRS had slapped David and Jennifer Crisp with a $111,170 lien in back taxes and the FBI began investigating.  Within days, more than 75 federal agents swarmed over 13 properties related to the former Crisp & Cole company.

In his plea agreement, David Crisp admitted that he and his co-conspirators caused losses of at least $29.8 million to defrauded lenders.

The Crisps’ guilty pleas brought to 14 the number of defendants who have done so in the case.

As for the success he appeared to achieve as a young real estate mogul, Crisp told the judge, “It got to my head, your honor.”

His Fresno lawyer, Eric Kersten, portrayed Crisp as an inexperienced “kid” caught up in a booming market. Kersten tried to shift some of the blame to Cole and the bankers anxious to give out loans during the real estate boom.

“Everybody was making money. It was like the wild West,” Kersten said.

Posted by on Jul 16, 2014 in Fraud, Scams | 6 comments

Short-Sale Flipping

Here is investigative reporting for you.

Jason Hidalgo from the Reno Gazette-Journal found that dual-agency short sales with a prearranged cash buyer accounted for more than 10 percent of Northern Nevada’s 2,096 single-family home short sales last year.  He looked me up in February to get my thoughts on short-sale flipping, and then in his story he lays out two offenders:

Here is an excerpt:

Krch Realty, which triple dipped commissions on more than half of its dual-agency short sales with cash buyers last year, did not respond to a request for comment for this article.

ssmarshallMarshall Realty accounted for nearly a third of such short sales in 2013. Broker-owner Marshall Carrasco defended his company’s transactions and referred further questions to his lawyer, who wrote to the Reno Gazette-Journal to “proceed with caution” on any article about Carrasco.

“Mr. Carrasco and Marshall Realty have represented many sellers in short sale transactions,” attorney James M. Walsh wrote. “As noted, full disclosure is made to the short sale sellers of the nature of the transaction. Mr. Carrasco, on occasion, presents these listings to individuals or entities that he knows are interested in purchasing short sale properties.”

Investor Jeremy Page of Harcourts NV1 Realty, a key player in the area’s real estate investment scene, stressed that all his short sale deals were done within the scope of the law. Page says his short sale purchases not only took distressed houses out of the market, they pumped more than $20 million back into the Northern Nevada economy in 2013 in the form of payments to suppliers and contractors who worked on his properties, as well as real estate agent commissions.

Real estate experts say such short sales come at the expense of the average homeowners, who do not fully understand how real estate transactions work, making them easy targets. It’s a problem that’s not limited to Nevada but is seen in other states as well where agents bend the rules for profit, said Jim Klinge, broker for California-based Klinge Realty.

“Typically, the homeowners don’t even know what they signed when these sharks get into their living rooms,” Klinge said. “I have had people call me asking if they have been taken advantage of, and in every case the answer is yes, but they never asked questions.”

The practice is especially a concern in Nevada, which saw the steepest decline in home values at the peak of the U.S. housing crisis. In recent years, the FBI identified the Silver State as a prime target for short sale fraud due to its high percentage of distressed properties.

Klinge called the lax environment surrounding short sales laughable.

“Nothing is done by anybody to stop this outright defrauding of banks, servicers and investors,” Klinge said. “There is no law enforcement or industry watchdogs, so it runs unabated. When other agents see people get away with it and make 5 percent or 6 percent commissions, then the amateurs give themselves permission to do it, too. It is going to take a district attorney vigorously pursuing this until we see perp walks nightly” for it to stop.

This stuff happened in every major city in America over the last 2-4 years, and thankfully it’s mostly over.  Thank you Jason for a great investigative report!

Jason answers reader questions here:

Their Facebook entry here with 25+ comments and 57 likes:

Posted by on Apr 22, 2014 in Fraud, Scams, Short Sales, Short Selling | 2 comments