State of NevadaOffice of the Attorney

General

Foreclosure Rescue

What is Foreclosure Rescue Fraud?

Phantom Help Foreclosure Rescue Consultant charges

outrageous fees either for phone calls and paperwork the consumer could have done/him herself.

Homeowner is left without enough assistance to actually save the home and with little or no time left to prevent this grievous loss by the time s/he realizes it.

The consultant essentially abandons the homeowner to a fate that might well have been prevented with better intervention.

What is Foreclosure Rescue Fraud?

Bailout In this scam, the homeowner is deceived

into signing over the title with the belief that he will be able to remain in the house as a renter and eventually buy it back over time. The terms of these scams are so onerous that the buy-back may be impossible, the homeowner losses possession and the “rescuer” walks off with most or all of the equity.

What is Foreclosure Rescue Fraud?

Bait-and-Switch: In this scam, the homeowners think they

are signing documents to bring the mortgage current, but instead actually surrender their ownership. They usually don’t even know they have been scammed until they are evicted.

How has the State of Nevada Responded to the Problem of Foreclosure Rescue Fraud?

2007 Legislation Session witnessed the passage of AB 440. AB440:

1. Creates a statutory definition of a foreclosure consultant2. Requires that a foreclosure consultant perform their

contracted duties before receiving payment in addition to other prohibited activities

3. Creates an administrative penalty for foreclosure consultants who violated these provisions enforced by the Nevada Mortgage Lending Division.

4. Creates a statutory definition of foreclosure purchaser5. Subjects foreclosure purchaser to administrative monetary

penalty for violations of these provisions6. Provides for a private right of action from a foreclosure

consultant who violates these provisions7. Provides actual and punitive damages to victims for

violations plus reasonable attorney fees.

NRS 645F.300-NRS 645F.450

NRS 645F.400

A foreclosure consultant cannot:

claim, demand, charge, collect or receive any compensation until after

he has fully performed each covered service that he contracted to

perform or represented he would perform. Any charge for services must

also be fully disclosed to a homeowner. A foreclosure consultant cannot

demand compensation for services in the form of any assignment of a

Homeowner’s wages, a lien on real or personal property, assignment of

a homeowner’s equity, or other interest in a residence in foreclosure.

The Nevada Attorney General

Where fraud is involved criminal statutes may be utilized to punish the “rescuers.” However, the State usually is not able to help individual homeowners save their homes.

Criminal Statutes

Deceptive TradeTheftObtaining Money Under False

PretensesRacketeeringOther Charges depending on

circumstances

Nevada Attorney General’s

Mortgage FraudTASK FORCE

Nevada Foreclosure Snapshot

Nevada is #1 in the nation for its foreclosure rate 3.4% of households entered foreclosure

in 2007 66,316 foreclosure filings – a 200%

increase from 2006 Statewide problem, but Las Vegas is

hardest hit area

New Legislation

AB 440 passed by 2007 Legislature Criminal penalties for mortgage fraud

Up to 20 years in jail $50,000 fine

Allows homeowners to seek to rescind a foreclosure reconveyance if transaction is fraudulent

New Legislation

AB 440 passed by 2007 Legislature Makes it an unfair lending practice for a

lender to make a loan without determining of borrower can repay it

Foreclosure consultants can’t collect payment for services rendered until all services are performed

Prohibits foreclosure consultants from taking wage assignments, liens or equity as compensation

WHY?

Meet happy

couple in their new house!

Now, house is in foreclosure

Enter Matt Marlon

I can help you!I’ll take care of paying off your

mortgage and I'll pay you some cash too. Just sign here.

Try and find me now!

Metro

Police

FBI

Secretary of State

Attorney General

Dept of Business

& Industry

Open up lines of communication

Share information Ensure prosecution

Strike Force Partners

Attorney General’s Office Bureau of Consumer Protection Bureau of Criminal Justice

Secretary of State Department of Business & Industry

Mortgage Lending Division

Most Common Cases

1. Phantom Help2. The Bailout3. The Bait & Switch4. Straw Buyers

Being Proactive

Member of the FBI Mortgage Fraud Task Force Assigned an investigator and attorney

Foreclosure Information Seminars Co-Hosted by State Treasurer and

possibly Senator Reid

Any Questions?

If you suspect your client is a victim of foreclosure fraud:

File a complaint form with the Nevada Attorney General

Report to Nevada Mortgage Lending Division, Dept. of Business & Industry.

(702) 486 0780 (775) 684 7060

Mortgage Fraud Resources

Southern Nevada Mortgage Task Force (702) 584-5555 (Federal, State, Metro task force)

http://fightfraud.nv.gov

http://www.ftc.gov

Additional Resources

http://foreclosurehelp.nv.gov

http://www.995hope.org

Nevada Attorney General Bureau of Consumer Protection

702 486 3194

775 684 1180

http://ag.state.nv.us