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Swindlers in Foreclosure Listings Not Punished



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By : John Cutts    99 or more times read
Despite the rising number of cons and scammers victimizing homeowners distressed by foreclosure listings, most prosecutors are still filing only civil actions against them. Civil actions only aim to recover victims’ losses; they do not put fraud perpetrators in jail.

North Carolina’s attorney general Roy Cooper said it is difficult for his office to launch investigations on misdemeanors. Only a few states have attorney general offices that are able to launch efforts to file criminal charges and seek jail time for swindlers focusing on foreclosure listings.

Consumer and housing advocates have been calling for the criminal prosecution of scammers using foreclosure listings to victimize homeowners. They say imprisonment is a much better deterrent to scammers than fines. Tom Bartholemy, head of Better Business Bureau, advocates the filing of criminal charges. He said criminal prosecution will surely get the attention of foreclosure scammers.

Especially in Las Vegas and other parts of Nevada hit by foreclosure listings, swindlers are having an easy time. They have lots of prospective clients to choose from. One of these is El Salvadoran immigrant Hugo Malara, who was victimized after he lost his job and defaulted on his mortgage payments.

Malara and his partner paid $800 to Derric Robinson, who was introduced to them by a friend as a loan restructuring expert. Malara never got any help from Robinson, although Robinson insisted Malara was to blame because he did not cooperate.

Bartholemy said his North Carolina office has accepted about 1,700 foreclosure-related fraud complaints in 2008 while Nevada’s Bureau of Consumer Protection has been receiving more than 100 complaints a month.

Maryland, Florida, Alabama and North Carolina are just some of many states which deem foreclosure fraud cases are better served in civil courts. In Alabama, the attorney general usually finds out first if there is money to be recovered from the foreclosure consulting firm before criminal charges are filed.

Nevada and California, two of the states with the highest number of foreclosure listings, have taken steps to punish cons with imprisonment. In California, the attorney general had sentenced foreclosure fraud cons to six years in jail. In Nevada, in response to the rising number of complaints largely caused by thousands of foreclosure listings, legislators have finally criminalized foreclosure fraud. The fraud law imposes up to 20 years’ imprisonment plus a penalty of $50,000 to anyone victimizing a distressed homeowner.


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