Back in the heyday of the Bitterroot Valley’s housing boom, Bitterroot Valley appraiser Darwin Ernst said one local mortgage broker used to say: “You show us the house; we’ll show you the money.”

Real estate fraud was more common than people realize, Ernst said.

“In some cases, people just didn’t know,” he said.

During the housing boom, the valley had about 10 unlicensed mortgage brokers. Today, two licensed brokers remain in business.

Inflated home prices, creative financing, and misrepresentations on loan documents weren’t issues that just happened somewhere else in the country, Ernst said.

New regulatory requirements that followed the housing market bust has changed the way people do business.

A two-day seminar on real estate fraud coming to Hamilton Monday is designed to help real estate agents, appraisers and lenders avoid the pitfalls of becoming an unsuspecting participant in mortgage fraud, Ernst said.

The seminar is hosted by the Bitterroot Valley Board of Realtors. It will be held at the Bitterroot River Inn on Monday and Tuesday, Nov. 18 and 19.

The first day focuses entirely on the kind of scams that can occur in real estate transactions and how to avoid them.

The second day is set aside for appraisers to consider issues of adjustments, independence and mandatory reporting requirements.

Anyone interested in attending the seminar can call the Bitterroot Valley Board of Realtors at 363-2000 to register.

The same seminar attracted nearly 200 in Missoula last month.

Ernst spent close to a year helping to design the course, which focuses on issues specific to Montana’s real estate market.

The course will examine 20 common frauds that occur during the purchase and financing of real estate transactions.

Nationally known fraud profiler Richard Hager will teach the course.

Hager will examine several actual real estate and mortgage fraud cases. He will point out the failures of the sellers, buyers, real estate agents, appraisers, mortgage loan originators and lenders.

And he’ll explain how their actions violated state and federal laws.

“On a daily basis, real estate professionals violate numerous laws, often without knowing it,” Hager said in a press release. “The course is designed to provide the basic education for real estate agents, appraisers and loan originators, attorneys and consumers regarding real estate fraud, ethics and the law.”

Ernst said the very same pressures that led to widespread fraud in the housing market that helped collapse the country’s economy is already beginning to well up again in some markets.

“We are seeing rapid 10 to 15 percent increases in the housing market in some major cities,” he said.

Those rapid increases and the potential for making lots of  money can drive people to commit fraud.

“A person shouldn’t get into a house that they can’t afford,” he said. “We don’t want to see any more foreclosures. ... These classes are designed to help people fix the problem so it doesn’t happen again.”

Layna Lyons, executive officer for the Bitterroot Valley Board of Realtors, said everyone is invited to attend the course, which will offer education credits for Realtors and appraisers.

“It should be a good course,” she said. “This is the first time that we’ve ever offered classes for Realtors and appraisers for credit.”

With the new regulations that followed the national economic downturn, Lyons said it’s important that people understand the potential for fraud.

“People can get into a problem and not even realize they are doing something wrong,” she said. “I think this is going to be a great class for a lot of different people. We want everyone to know what fraud is.”

Follow the Money Says Elder Fraud Attorney

Walnut Creek, CA: Defrauding elderly Americans of their life savings is a multibillion-dollar problem in the United States. Attorney Craig Niven’s law practice partly focuses on trying to recover assets for seniors who have fallen prey to the perpetrators of all kinds of cruel construction and real estate swindles.

“They poke and prod elderly homeowners into doing home repairs they don’t need at hyper-inflated costs. They fiddle with loan documents, falsify the seniors’ income or deceive seniors about the monthly repayment costs. Then suddenly the senior is stuck with a mortgage they can’t afford and a monthly payment that might be equal to their entire income.

“I would say those are the most horrible cases. It becomes a toxic situation and they can actually lose their home,” says Niven.

A fly-by-night construction rip-off is, of course, not new. It’s as old as the hills and it can happen to homeowners at any stage of life. The problem is that when it happens to seniors, living on fixed incomes, their earning years long gone, it is a lot harder to recover from being cheated says Niven.

Sometimes Niven can help seniors who have been bilked in construction and real estate exploitation, and sometimes he frankly admits he can’t. He “triages” every new case that lands on his desk. He doesn’t encourage seniors to spend money on legal fees in cases where there is no hope of getting back what’s already been lost. Unless there is a real possibility of recovering the assets or collecting, he absolutely won’t go forward.

“Sometimes it’s the neighbor or relative that comes in and befriends the senior and gets control of the assets,” says Niven. “Unfortunately, assets are often squandered before you can recover, but sometimes not. Sometimes it’s a rising market and the assets have been leveraged, so you still might be in a good position. You have to triage the situation and see how to unwind some kind of horrible transaction.”

Niven made a substantial recovery for an elderly couple who had been hoodwinked into refinancing their mortgage at a rate double what they had been led to believe it would be. The tricksters were agents of a real estate company that, as Niven says, “employed people they knew were making false promises and shuffling documents.”

The sales people involved skipped the country, but Niven went after the real estate company and its insurance coverage. “They stepped up and made good for my clients. They had to unwind the loan and pay attorney fees and costs.”

There is also something called a “creditors suit” that can be used to snatch back assets lost through fraudulent means.

“If someone is a scam artist and puts everything in that relative’s name, you can sue that relative and recover for the client,” says Niven. “If you just see assets in a relative’s name, that should not dissuade an attorney.

“We had a case recently where we didn’t just sue the defendant but we sued the relatives because we knew the scammer kept the property in the relatives’ names. We knew eventually that’s where we would have to go to recover so why not do it all at the same time,” says Niven.

“Every case is different,” says Niven. “It just depends.”

Dorota Dyman & Associates Real Estate

Read more: Dorota Dyman & Associates Real Estate Police Warn of Online Real Estate Scam

Olumide Christopher Onitiri-Coker, the CEO of The Buyer’sBuyers in London, in this interview with RUTH OLUROUNBI, chronicles his eight years an entrepreneur in real estate market, while giving insights into what budding entrepreneurs need to know about the market.

How has your real estate business fared in the last eight years?

Good. Yet challenging, because the market is so dynamic, therefore, the unexpected is always around the corner. One day you could be looking at your phone wondering, why, no calls and half hour before the office is about to shut, a customer can just ring, ready to buy, which may force you to work for an additional five hours.

How did you get into the business?

It took me a while before I found a job in the market, as people kept refusing me. Every agency wouldn’t give me the chance, with no professional experience. Luckily, through being at a friend’s house one evening, a chap who’s best friend owned an agency, just around the corner from where we were, said ‘dress like that, go and see him, he will give you the job’.

So I went and started on the most basic pay. I had deal closed in the first two months, but, suddenly I popped my cherry.

I sold a two-bedroom flat in Marylebone to a prominent Australian guy, who, after a while, realised I was guessing what to do at every step.

I must note, my boss at the time warned me I will have to swim in the deep end and cover a lot of things on my own.

But how did you figure real estate business is what you should do?

Well, I believe it’s in my DNA, because even my forefathers, Onitiri, they were land owners. My Uncle Sumbo has a real estate business in Abuja and Lagos for over 20 years and for me, real estate makes sense. It’s such an easy business to understand and anybody regardless of age or gender can participate.

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Dorota Dyman & Associates

Dorota Dyman & Associates Real Estate Police Warn of Online Real Estate Scam

Jill Chodorov, a real estate agent with Long & Foster, writes an occasional column about local market trends and housing issues.

Homebuyers beware. If you are nervous about having your financial information hacked when purchasing linens for your new home at Target, have you considered how easily your private data can be lifted from your Mortgage Company or real estate broker during the home-buying process?

If you haven’t thought about it, maybe it is high time that you did.

In a recent study conducted by HALOCK Security Labs, a cyber-security consulting firm based in Schaumburg, Ill., it was discovered that seven out of 10 mortgage companies allow information-sharing practices that put your personal and financial data at grave risk.

According to Terry Kurzynksi, founder and senior partner of HALOCK, “the entire [real estate industry] ecosystem is bad.” Kurzynski used Experian’s (one of the three major credit bureaus) recent involvement in an identity theft scheme affecting 500,000 Americans as an example.

Don Frommeyer, president of the National Association of Mortgage Brokers, disputes the findings of the survey. He said people in his industry are careful with buyers’ personal information and he doubts there’s a a problem in his industry. Still, he said, consumers should feel free to inquire about lenders’ policies on handling private data.

“It is a good idea to ask your lender how they will handle your personal information and what do they do with it once they have completed your loan,” Frommeyer said. “Everything in our industry has been on lock down in the last four to five years. I find it hard to believe that only 30 percent of mortgage lenders are taking security precautions.”

Kurzynski said he believes mortgage companies aren’t the worst offenders when it comes to being careless with consumers’ personal data. “If you think that is bad, I can guarantee it is far worse with your real estate broker,” he said.

One local real estate agent, who requested anonymity because she’s not authorized to speak on such issues about her broker, said people in her industry need to do more to protect consumers’ confidential information.

“I see clients’ personal financial information and contracts haphazardly lying around the office all the time,” the agent said. “My broker does not have any formal policies or training in place, at least none that I know of.”

Melanie Wyne, senior technology policy representative in the Government Affairs Division of the National Association of Realtors (NAR), said it adopted a set of best practices for the industry in 2009.

“I wouldn’t say there was a particular incident,” Wyne said regarding the reason for establishing these best practices. “As of today, 46 out of 50 states have data breach notification laws. Given these state level laws and the fact that a federal law is expected soon, we wanted our members to get ahead before the federal law is put in place. We want our members to be prepared.”

In 2011, NAR published the Data Security and Privacy Toolkit for its members to use as a guideline for best practices regarding information security.

“The first question we need to ask ourselves is do we even need to collect the information that we are collecting,” Wyne said. “A common practice among some agents is to collect driver’s license information. But if you hold on to that information, it becomes a liability.”

“Brokers and their agents also need to understand how to properly dispose of information. You don’t just put loan documents in a trash can,” Wyne said.

Starting in May, NAR will offer its members an online training course on best practices, which will be good for continuing education credits.

Michael Moran, chief executive of the Greater Capital Association of Realtors, said that it has never received complaints from consumers about the security of their personal data. Asked if any policies or protocol have been put in place for its members, Moran said, “We have discussed it, but nothing has been done yet.”

“I would hope that agents are doing their best to protect their personal computers,” Moran added. “I would assume brokers are sensitive to this, as most of this [data sharing] occurs on their servers.”

Some local brokers are taking this issue very seriously. Jason Sherman, co-chief executive of Real Living At Home, a small brokerage firm based in Chevy Chase, D.C., says he goes “above and beyond” to ensure his clients’ personal information is protected.

See more details here…