Berlin based DR. Schulte and Partner Rechtsanwälte mbB concentrate on assisting our clients preventing fraud and scams. Especially in real-estate related business relationships and contracts potential customers are supposed to take special care. In Germany as well as in the United States and every other capitalist Nation, the methods are similar.
As an example, here is what the Los Angeles County Sheriff’s Department has issued as a Victim’s Guide To Real Estate Fraud. (file.lacounty.gov/lasd/cms1_145250.pdf):
“Real Property Crimes
“Real Estate and Property Crimes
Scam artists operate profitably in the complex world of real estate sales and loans. Criminals use false representations, fine print and obscure procedures to steal the equity in your home or to commit loan fraud. Theft by false representations is a crime! If you believe that you have been the victim of real property fraud, law enforcement wants to know. The Los Angeles County Sheriff’s Department will investigate complaints of real estate fraud. If there is sufficient evidence to prove that a crime was committed, the Los Angeles County District Attorney will prosecute the offender. Here are a few of the more prevalent types of crimes being perpetrated in Los Angeles County.
Foreclosure Bailout Scam
Victims are lured by the premise of help for those who are “upside-down” and owe more on their home than it is worth. These homeowners are usually desperate and must either sell their home at a large loss or let the lender foreclose, severely damaging their credit. Often these “bailout” specialists target non-English speaking victims. The “bailout” specialist tells the homeowner that banks prefer to take a loss on a loan rather than take the home back on a foreclosure and if the loan is insured by FHA, the bank is spared the headache of reselling the home. The homeowner is told he is being offered an opportunity to arrange for a “short sale” of the house that will have no effect on his or her credit rating. The plan is usually for the homeowner to deed his or her house to the “bailout” specialist for a fee of between $1,000 and $2,500. The “bailout” specialist then either rents out the house or lets the now former homeowner liver there for a modest rent. The “bailout” specialist does not arrange for the short sale and fails to make the payments on the mortgage, resulting in the foreclosure and eviction of the tenants. The “bailout” specialist pockets the advance fee and all rental payments. On the surface it appears perfectly legal. A careful reading of the small print on the documents given to the victim may reveal warnings that his or her credit may suffer and that the “bailout” specialist is not bound to successfully procure a “short sale” or to reconvey the property.
Rental fraud scams involve the rental of homes that the con artist does not own. The con artist locates a vacant or abandoned house. It may be in foreclosure or perhaps a vacation home not in use. The con artist enters the house, changes the locks and advertises the property for rent, usually well below the market rental rate. An unsuspecting tenant pays a security deposit along with first and last month’s rent and moves in. Rent is collected and pocketed by the rental fraud perpetrator. The true owner and lender do not receive a dime. When the fraud is discovered the tenant is evicted, losing his security and rental deposits. Some crooks are so bold that they will rent a piece of property to several different tenants, collecting advance rents and deposits and then vanish. In a creative twist to this fraud some scammers claim that they hold legal title to the property under the old law of “adverse possession”. Be alert for possible rental fraud when utilities are held in the name of a third person, or when the landlord insists that the rent be collected in person without a receipt. Also be wary if legal notices are mailed or posted on the property and the landlord tells you simply to ignore them.
Home Equity Thefts
People who have built up equity in their homes are ripe targets for a variety of confidence games. High pressure home improvement contractors offer elderly homeowners unnecessary and overpriced home improvement on “easy” credit. Slick salesmen may offer to refinance the home at “:attractive” interest rates to provide cash to the home owner and to pay off bills. Victims report that they were asked to sign blank contracts, that they were not allowed to read the contracts before signing or that they were not given copies of the contracts. Only later does the victim realize that the contract contains terms completely different than what were promised. Too often it turns out that the home improvement contract has “eaten up” all of the equity in the home. The homeowner learns that he has signed high interest mortgages with enormous loan fees. The homeowner may be faced with loan payments he cannot afford. “Attractive” loan payments cover the interest only. The principal is due in one “balloon” payment after a few years. When the “balloon” payment is due, the homeowner must take out another loan, paying additional fees and costs or risk losing his or her home through foreclosure. Criminals may commit an outright forgery to gain control of loan proceeds contained in a home improvement contract, home sale or refinance.
Straw Buyer Scams
Scam artists find ways to cash out equity of real property entrusted to them using “creative financing”. They may employ phony “straw buyers”, crooked escrow agents, real estate appraisers or notary publics. The scam artist asks the “straw buyer” to sign loan papers using his or her good credit. The scam artist pockets the loan proceeds and fails to make the loan payments. The straw buyer may have committed both state and federal crimes. His or her credit is ruined and he is obligated to pay the loan amount. Your best protection is to NEVER submit to pressure and to ALWAYS insist on getting financial or legal advice before you commit to a contract or loan. Remember you have a three day “cooling off” period in which to cancel a loan or contract. Use the time to think about the consequences of such a loan or contract.”
Für unsere deutschen Mandanten gibt es hier eine kurze Zusammenfassung:
Dr. Schulte und sein Team Rechtsanwälte mbB beschäftigen sich auch mit problematischen Immobiliengeschäften. Wir sind dabei sowohl innerhalb als auch außerhalb Deutschlands tätig. Als ein Beispiel für einen amerikanischen Warnhinweis zitieren wir hier aus dem offiziellen „Opfer Leitfaden von Immobilien-Betrug“ des Sheriffs vom Los Angeles County.