Real Estate Scams

Investing in Real Estate is not easy. IF recent history were to indicate, you don't need to read media- ask a family member or neighbor who has gone through a short sale, foreclosure or bad real estate deal in the past six years and testimonials are readily available.

But still I see:

Guru's and seminars flooding the market with get rich on buying American Real Estate.

All you have to do is turn on the seminar ( for a cost of five hundred to two thousand dollars) and
you can find deals on Real Estate in all the distressed markets of United States. Then next all you have to do is buy their books, C.D.'s, and legal fees to set up your LLC's and riches will be yours.

In 2013 I have been contacted by nearly a thousand investors from Canada, the UK, Australia, China, even Germany to buy properties valued under $80000 in the US.  The risk seems small from far away but what is not delivered in the advice is:

how to manage good tenants in depressed markets
how to maintain property with an honest manager
how to know when to sell
how to find financing with a sea of paperwork

These "how too's" seem to be the things I would like would be investors to have a plan for when their investment goes wrong.

My top advice to avoid scams:

Buy the best quality property in the best location (close to your home or someone you trust with cash).
Mortgage loans in the United States are full recourse.  Home loans in America will show on your
credit report. Investment real estate in the U. S. is taxable here in the U. S. Ninety-nine percent of lenders will not loan to a LLC or Corporation.  Research before you buy. Get American credit references and an American bank account before you shop. Get more insurance than you think you need.

My list of buzz words and phrases to run from if someone is selling you get rich in real estate:

  air-tight
  always
  anyone can make a killing
  asset protection
  association
  automatic
  boot camp
  bulletproof
  bureau
  Christian
  cinch
  club
  college
  complete
  confidential
  consultants
  cookie cutter
  co-op or cooperative
  creative
  deep discount
  discount
  Don’t work for money. Make money work for you  
  dream stealer
  easy
  easy money
  education
  extension
  flipper
  Florida
  fool-proof
  foreign
  fortune
  gains
  get rich-quick scheme
  global
  gold mine
  insider
  institute
  judgment proof
  land bank
  lazy way
  legal
  LDS         (wonderful loving people who seem to  get looped into these)
  LLC
  magic
  mentors
  money machine
  national
  network
  no-brainer
  No money down
  nothing down
  offshore
  painless
  perfect
  pro
  program
  quick
  Real estate
  remove doubt
  removes guesswork
  removes risk
  riches
  risk-free
  safe
  secret
  Smart   
  success
  sure-fire
  take the fear out
  Tax free
  trust
  U.S. or United States or American
  Utah
  wealth
  win
  wiz

High Balance Loan Limit One More Year

Maximum Conforming and High Balance Loan Limits Remain the swame for HERA Loan Limits for 2014: Summary of High-Cost Areas

Fannie Mae and Freddie Mac announced today the extension of High Balance Mortgage Loan Limits. Frankly we are fortunate as our government seems to be backing out of the loan business.

Metropolitan Statistical Areas: 

Statistical Areas and Rural Counties where Maximum HERA Conforming Loan for 2013

Limits for Mortgages Acquired in 2014 exceed $417,000 in Contiguous U.S. or $625,500 for locations in Alaska, Hawaii, Guam, and U.S. Virgin Islands

Published November 27, 2013

ORANGE COUNTY CALIFORNIA Most zip codes $ 625500. High Balance Mortgage Loan remains available

VA Washington-Arlington-Alexandria, DC-VA-MD-WV (Metropolitan Area)

Component Counties (VA): Arlington, Clarke, Culpeper, Fairfax, Fauquier,

Loudon, Prince William, Rappahannock, Spotsylvania, Stafford, Warren

Component Cities (VA): Alexandria, Fairfax, Falls Church, Fredericksburg,

Manassas, Manassas Park

$ 625,500 $ 8 00,775 $ 967,950 $ 1,202,925

VA Cumberland $ 535,900 $ 6 86,050 $ 829,250 $ 1,030,600

VA King and Queen $ 535,900 $ 6 86,050 $ 829,250 $ 1,030,600

VA Lancaster $ 442,750 $ 5 66,800 $ 685,100 $ 851,450

VA Louisa $ 535,900 $ 6 86,050 $ 829,250 $ 1,030,600

VA Surry $ 458,850 $ 5 87,400 $ 710,050 $ 882,400

WA Seattle-Tacoma-Bellevue, WA (Metropolitan Area)

Component Counties: King, Pierce, Snohomish

$ 506,000 $ 6 47,750 $ 783,000 $ 973,100

WA San Juan $ 483,000 $ 6 18,300 $ 747,400 $ 928,850

WV Washington-Arlington-Alexandria, DC-VA-MD-WV (Metropolitan Area)

Component County (WV): Jefferson

$ 625,500 $ 8 00,775 $ 967,950 $ 1,202,925

WY Jackson, WY-ID (Micropolitan Area)

Component County (WY): Teton

$ 625,500 $ 8 00,775 $ 967,950 $ 1,202,925

MP Northern Islands $ 524,400 $ 6 71,300 $ 811,450 $ 1,008,450

MP Saipan Municipality $ 529,000 $ 6 77,200 $ 818,600 $ 1,017,300

MP Tinian Municipality $ 532,450 $ 6 81,650 $ 823,950 $ 1,023,950

trellis

rain chain

203K The Fixer upper Loan

FINANCING A FIXER-UPPER? PURCHASE AND REHAB ALL IN ONE FHA LOAN.

This program offers the unique features that make FHA loans excellent financing solutions in today’s market:

 PURCHASE OR REFINANCE 1-4 UNIT PROPERTIES (OWNER-OCCUPIED ONLY)
FHA DOWN PAYMENT (3.5%)
FLEXIBLE CREDIT
QUALIFYING ASSUMABLE LOANS

You just love the house. Except for the leaky pipes. Or maybe the kitchen is too small. For the house that's almost perfect, we have the perfect solution: Our Renovation Mortgage, a mortgage and home improvement loan all in one. 

Purchase or refinance 
Remodel the kitchen or bath 
Renovate or add a room 
Paint the house or add siding 
Add a porch, deck or patio 
Replace a leaky roof 
Put in new flooring, carpeting or tiling 
Update electrical wiring, plumbing or heating systems 
Conserve energy with new windows


Plus much more! Call Today! Caroline Gerardo Loan Officer NMLS #324982 Cell 949-637-8190 Office 949-784-9699 eFax 855-883-4303

CarolineGerardo@eaglehm.com
http://www.eaglehomemortgage.com/CarolineGerardo



Committed to Seeing You Home. Eagle Home Mortgage 8105 Irvine Center Drive #500 Irvine CA 92618 NMLS #849059 CA #813I609 Universal American Mortgage Company of California, dba Eagle Home Mortgage of California. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act. RMLA #4130383, NMLS #252392. Certain restrictions apply. This is not a commitment to lend. Applicants must qualify.


  Caroline Gerardo Barbeau  NMLS# 324982| 8105 Irvine Center Drive #500, Irvine, CA 92618

Fair Lending

ECOA Violations identifying mortgage lenders and fixing or penalizing mortgage companies, banks and lenders who are "unfair"

 
Corrective action is required “…when the self-test shows that it is more likely than not that a violation occurred, even though no violation has been formally adjudicated” (12 C.F.R. §1002.15(c)(1)).  In order to secure the privilege that comes with self-testing and corrective action, the corrective action must be “appropriate.” 

Regulation B provides guidelines for determining whether a creditor’s response to potential ECOA violations is appropriate.  First, the corrective action must be “…reasonably likely to remedy the cause and effect of a likely violation…” (12 C.F.R. §1002.15(c)(2)). 

regulations state that corrective action is reasonably likely to remedy the cause and effect of a violation if it:

• Identifies “…the policies and practices that are the likely cause of the violation…” and
• Assesses the “…extent and scope of any violation…”

(12 C.F.R. §1002.15(c)(2))

If self-testing reveals evidence of an actual or potential compliance failure, the creditor must determine whether it is necessary to provide remedial relief.  If the self-test involved the use of testers, and one of the testers received discriminatory treatment, the creditor is not required to provide remedial relief to the tester (12 C.F.R. §1002.15(c)(3)(i)). 

However, if the self-test shows that a credit applicant’s rights “…were more likely than not violated,” then the creditor is required to provide remedial relief to that applicant, unless the statute of limitations on an action available to the applicant has expired (12 C.F.R. §1002.15(c)(3)(ii-iii)).

In 2009, the DOJ, the Department of Housing and Urban Development (HUD), and the federal banking regulatory agencies wrote a Statement of Policy to address concerns regarding evidence of discriminatory treatment experienced by prospective homebuyers and borrowers.  This Statement includes answers to questions asked by financial institutions, including answers to inquiries regarding what a lender should do if self-testing shows evidence that lending discrimination exists.

·         Determining whether the discriminatory act or practice was the result of faulty lending policies, poor implementation of lending policies, or an isolated incident

·         Correcting policies or practices that may have led to a discriminatory act or practice

·         Disciplining and training employees involved

[1] Department of Housing and Urban Development and Department of Justice, et al. “Policy Statement on   Discrimination in Lending.”  3 Dec. 2009. Question 6. http://www.fdic.gov/regulations/laws/rules/5000-3860.html

Noting that while it does not “expunge or extinguish legal liability for violations of the law,” proactive measures that include self-testing and corrective action “…will be considered as a substantial mitigating factor by the primary regulatory agencies when contemplating possible enforcement actions.” [1]  The Statement also notes that self-testing and self-correction are regarded as a “substantial mitigating factor” when the DOJ and HUD determine whether to seek penalties in an action for ECOA violations.

Photographs of birdhouses in my Laguna Beach neighborhood, to cheer you up and make this legal information not so boring.