Austin Texas Real Estate Blog

Back in April of 2007, Inman News reported a 42% increase in suspected mortgage fraud rates nationwide over 2006. Well, the trend seems to be escalating, as the FBI warns in a report out recently. The Bureau warns that the pace seems to be quickening, given figures for the first half of fiscal year 2008. The figures include losses from the sub-prime mortgage fiasco.

Mortgage fraud includes inflating income or assets, forged documents, misrepresenting intention to occupy the property and exaggerated appraisals. The FBI report warns of increases in fraud, probably due in part to the depressed real estate market, opening the door for perpetrators of fraud. The FBI also warned of an increase in identity theft mainly targeting people with good credit ratings.

In March, ABC News reported on mortgage rescue scams, where con artists purport to help cash strapped home owners pay off their mortgages, only to abscond with the fee they charge, leaving the home owner more strapped than ever and facing foreclosure. The technology of today unfortunately adds to this because it allows easier access to personal information for identity thieves. When home owners submit information to get a home equity loan or line of credit, thieves steal the information and send the financial institution a fax, requesting them to transfer the funds elsewhere.

The FBI bases its gloomy predictions on an increase in fraud complaints, saying they “could be headed for 70,000″ suspicious activity reports. The higher rate of complaints enforces FBI director Robert Mueller’s warning that “as housing prices continue to fall, more financial misdeeds will no doubt come to light.”

The FBI is currently investigating over 1,300 cases of mortgage fraud and 19 investigations into subprime lending cases.

As with all good things and developments like the green movement, it seems like there’s someone out there ready to take advantage of the technology learning curve and people’s desires to do good. This company was stopped before they could do too much damage, but I personally hope that they get what they deserve for defrauding the environmentally conscious Texas public.

Joe

Excerpt from My Fox Austin.

05/14/2008 — Texas Attorney General Greg Abbott obtained a temporary restraining order and limited asset freeze Monday against Forum Trading, Inc.

The state’s legal enforcement action charges the Austin-based company, which is organized as a multi-level marketing scheme with independent distributors, with marketing energy devices it falsely claims will significantly reduce power consumption, extend the life of household appliances and save consumers money.

“With Texas families focused on energy prices and seeking cost savings, these defendants are promising lower electricity bills but failing to deliver,” Attorney General Abbott said. “Experts who reviewed the defendants’ products discovered no actual savings for well-intentioned purchasers. The Office of the Attorney General will continue to aggressively crack down on scam artists who attempt to illegally profit from Texas families.”

Court documents filed by the state indicate that Forum Trading, Inc. and several affiliated companies, including Xium Corporation and Xedia Technologies Inc., deceptively market and sell small devices that can store electric energy. The defendants falsely claim that the “Xpower Energy Saver,” which they sell for almost $200 per unit, will reduce consumers’ electricity consumption by up to 25 percent, while the “Mega Power Saver,” priced at nearly $300, will result in more than 10 percent savings.

However, engineers who tested the purported energy-saving products at the University of Texas at Austin concluded that the Xpower Energy Saver could produce no more than a 0.06 percent reduction in electric consumption in an average house. The Attorney General’s laboratory expert similarly concluded that the Mega Power Saver could provide, at best, no more than one percent total energy savings. According to the state’s expert, the devices have no effect on the life of household appliances, despite the defendants’ claims that the Xpower Energy Saver allows appliance motors to “run about 10% cooler.

The laboratory testing also revealed that the products are, in reality, ordinary capacitors, which are often used in electronic circuits to store energy or to differentiate between high-frequency and low-frequency signals. Capacitors are regularly used by electricians, and they can be purchased for less than $20.

You can read the whole story at MyFox Austin.

January 26th, 2008 2:31 PM

If this agent did truly withhold information then s/he is getting what they deserve. Truth and honesty are the most important qualities that a fiduciary has to his/her clients.

Many people may feel they overpaid for a home they bought during the housing boom, but one California couple is trying to do something about it. According to the New York Times, Marty Ummel and her husband Vernon, of Carlsbad, are suing their real estate agent, claiming he withheld information that similar homes in the neighborhood were selling for less than the home they eventually bought. Real estate lawyers say the case, which goes to trial on Monday, brings into question the valuation process and could be “the first of many similar cases in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase,” the Times reports. Wed, Jan 23, 2008