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A Good Real Estate Lawyer Can Help You With Fraudulent, Predatory Lending Practices

A wave of mortgage fraud is rippling through pockets of the Valley, inflating home values through scams called cash-back deals. Left unchecked, cash-back deals cost homeowners and lenders millions of dollars and could erode confidence and values in Arizona’s real estate market.

When an investor or lender preys on homeowners, charging them outrageous fees and interest rates for a loan, it’s called predatory lending. It’s an unethical practice, though difficult to prosecute because there isn’t a specific law making it illegal in Arizona.  But if regulators can prove groups are operating illegally as lenders, they have more leverage to stop them.  There are experienced Phoenix lawyers who can help you if you’re in need of help with these types of situations.

The mortgage fraud task force was formed by regulators and law enforcement to thwart cash-back deals, and is also is targeting foreclosure-rescue scams and illegal short sales.  There are Phoenix law firms who are becoming well-versed in handling these types of spurious cases. Cash-back deals involve getting a mortgage for more than a home is worth and pocketing the extra money in cash. The deals inflate home values and leave some homeowners stuck with overpriced mortgages.

Legislation to deter foreclosure-rescue fraud was introduced in Arizona this year but dropped because some don’t think more laws are the answer. At least ten states, including California, have laws to deter foreclosure-rescue fraud. A task force is being formed to draft new Arizona legislation.  “I am waiting for regulators to combine legislation for both the subprime and predatory problems. There are Valley homeowners who got taken advantage of when they bought homes,” said Jay Butler, director of realty studies at Arizona State University Polytechnic. “Now they are getting taken advantage of and losing those homes.”

Phoenix lawyers have been paying particular attention to this most recent of phenomena, due to the Valley being prime territory for questionable subprime loans, and the resultant crisis which has plagued the nation. Many Phoenix, Arizona lawyers can help you with advice, counsel or referral to other associated real estate law firms who can handle illegal short-sell cases.

The Valley’s high-velocity housing market of 2004-2005, and stiff competition among lenders who let buyers put almost nothing down on a home, created the opening for these cash-back deals. Now, as the housing market has slowed, buyers find they can’t resell their homes for what they paid. Foreclosure notices for those struggling buyers as well as speculators who have pulled money out of homes are climbing.

“Arizona was like a housing gold rush for speculators from California, Florida and Texas a few years ago,” said Detroit real estate agent and fraud activist Ralph Roberts, author of the book Flipping Houses for Dummies. “But home prices stopped climbing, and speculators got greedy. Now the cash-back scam is going to make the savings and loan crisis of the 1980s look like a soft landing.” (The Arizona Republic, Jan. 20, 2007)

Seek out a competent Phoenix lawyer if you suspect there was fraud in your real estate situation. There are many respected Phoenix law firms to choose from in the Valley, who are on your side in seeking just compensation.

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Tags: phoenix arizona lawyer, phoenix law firms, phoenix lawyer

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