Editor's note: More than 1.2 million homeowners in California have faced foreclosures and the number of foreclosures this year is expected to be higher than last year. The foreclosure crisis has also given rise to new waves of scam artists. NAM editor Ngoc Nguyen asks Deputy District Attorney David Lim, who leads the Alameda County District Attorney's Real Estate Fraud Unit, how homeowners can protect themselves against mortgage fraud.
Has there been an increase in mortgage scams?
Lim: Since I've been here, it's sort of been out of control. We went from having one DA and two inspectors to having two DAs and four inspectors and we're still barely keeping up with the flow of real estate fraud complaints.
What is the most common type of scam in the foreclosure crisis?
Lim: People who collect money from homeowners, saying they would modify the loan and negotiate with banks, and instead they don’t do anything. And those are pretty straightforward, almost just theft scams. You take money from someone and you don't perform.
How can homeowners protect themselves from getting scammed?
Lim: You shouldn't just be making quick decisions like, 'Oh, I like this person. I like the way they look, or they seem nice, or this program sounds good.' You have to do your homework.
Don't trust someone just because they look like you, just because they sound like you, and just because they say they come from the same village as you or went to the same high school. Assume that everyone is a stranger and assume everyone is out to cheat you. Remember that the goal of a cheat is to separate you from your money. Anytime anyone asks you for money, think before you give money and if you do give money, give money you can trace. Write a check; get a cashier's check; don't give cash.
What makes a scam effective? What vulnerabilities is the scam artist preying on?
Lim: Criminals are playing on your emotions and catching you in a vulnerable position. They are catching homeowners either when they are being greedy and they think they can make money, or now in the current climate, because they face the loss of their home, and they are desperate.
The other thing con artists are doing is they do play on your very base emotion. If you see someone who looks like you, sounds like you and is related to your culture, [they may still be a criminal]. Most of these crimes are affinity crimes--black on black, white on white, Asian on Asian.
Do scams differ among different ethnic and racial groups?
Lim: There are cultural aspects that the con artist can use to their advantage. If you take victims from Central America, many of them have fled their home country because of turmoil in that country, so they either fled from a civil war or corrupt government, so in many cases, there's a deep distrust of government, and police. If you talk to victims from Mexico, they never want to talk to police, because they think the police will ask for money. We are very clear to tell people, we are not a federal agency. We do not care about your immigration status. In fact, legally we are not allowed to ask you your immigration status.