SCAMS/FRAUD in today’s real estate and mortgage industry

“For the love of money is the root of all evil” and as someone else finished that by saying “and in America Ignorance of Money runs a close second.”

It is sad to see but these phrases are so specially very true when it comes to real estate transactions by inexperience and unscrupulous so called “professionals” working in our industry.

We do have SOME bad apples in our industry, just like in any other type of industry but fortunately for us and the consumers, there are laws that protect us all from those bad apples.

Recently HUD brought a federal lawsuit against Property I.D. Corporation. This company is a large hazard reporting company in California. The lawsuit also involves four California real estate brokerages: Realogy Corporation (formerly know as Cendant Corporation); NRT/Coldwell Banker Residential Brokerage Corporation; Mason McDuffie Real estate (doing business as Prudential California Realty); and Pickford Realty Ltd (doing business as Prudential California Realty) for creating a network of “made-up” companies designed to pay illegal kickbacks to these brokers in violation of RESPA.

The federal suit claims Property I.D. of Los Angeles made improper payments to the real estate brokers based on the referral of consumers to the hazard reporting company.

HUD’s investigation found that these made-up joint ventures appeared to exist solely for the purpose of funneling payments in exchange for the broker’s referrals of business.

To get the full story read HUD’s News release titled “HUD sues California Hazard Reporting Company and Four Real Estate Brokerages in Kickback Scheme” from the HUD website

Scams I’ve encountered are consumers paying up to $500 dollars or more to so called “credit repair companies” and received either a temporary fix where their credit score was brought up temporarily or simply were not able to improve their credit at all. Rapid rescoring is only available through a lender or broker. We use rapid rescoring to fix only negative and incorrect or inaccurate information on the consumer’s credit report. Companies that market directly to consumers are probably scams. Companies that promise to “repair” anything and everything on your credit report are certainly not legitimate.

If you need some counseling regarding your credit or finances, contact ONLY agencies that have Consumer Credit Counseling Services on their name and are non-profit. To find one near you, Google it. For example: Consumer Credit Counseling Services Santa Clara or you can search for the location near you at the National Foundation for Credit Counseling web site DebtAdvice.org.

You should also read this educational article from the Consumer Credit Counseling Services of San Francisco on “Rapid Rescoring”

This is another educational article titled “Credit Clinics? Can they really help?”

I’ve also encountered people that got involved with a greedy real estate/mortgage broker and are now facing a short sale or foreclosure.

A clear example of this are the many cases reported here in my hometown. According to public records from the California DRE (Department or Real Estate) and Secretary of State, Bic Pho (owner/broker) has business interest in a wide variety of companies handling nearly every aspect of a home purchase and even penetrating the commercial real estate arena. Companies like Online Termite, Vision Quest 21 Inc (doing business as Century 21 Su Casa, Century 21 Ruby and Triple Net Commercial Network Inc, Century 21 Ruby Fine Homes & Estates, Ruby Prestige Homes & Estates, Ruby Prestige Properties, Aborn Prestige Home and Estates, Aborn Prestige Home & Investments, Aborn Prestige Properties, Su Casa Realty), Mariposa Mortgage Inc, the Apprentice Enterprise Inc (doing business as California Properties/GMAC Real Estate and Su Casa/GMAC Real Estate), The Closing Co (escrow company), and others (Each franchise named is independently owned and operated from their franchisor).

Pho, some of his agents and employees have been named in many lawsuits, many of the lawsuits involved misrepresentation, non-disclosure and in my opinion plain and simple FRAUD!

To my surprise some of the comments from one of the agents involved in the lawsuit, Felipe Neri, were “Real estate agents are always the ones that take the blame from everybody,” “Banks don’t even check how much money their clients are making. That’s not our responsibility. We do the real estate.”

OHHHHH MY………can you believe this guy??

Felipe Neri ranked amongst the top 3 most successful agents inside the franchise in Northern California during the housing boom.

To get the full story I’ve included the following two links:

The Silicon Valley San Jose BizJournal reports on this tory “Other Century 21 franchisees complained about Su Casa”

The Oakland Tribune reports on this story “First-time homebuyers walk into financial trap”

[Update 8/7/2007]: This is my latest update on this article “San Jose CA broker linked to FRAUD claims over $2 million“

[Update 6/24/2008]: Major (former) Su Casa agent arrested in San Jose

Like I said before there are a few bad apples in our industry that unfortunately do make us all look bad. Like another Century 21 agent said “If one of us gets a black eye, we all get a black eye.”

Anyone who has filed a real estate fraud complaint against any agent is encouraged to update his/her contact information with the Real Estate Fraud Unit’s Paralegal, Carol Vega (408) 792-2639.

The moral of this story……well, money does make people do some very unscrupulous things and what’s worst the lack of knowledge on the consumer side certainly facilitates for these scams to take place and sometimes to go unnoticed. So my advice to my readers and the consumer in general is the following, do your homework in advance, ask questions, questions and more questions and if you are not getting all your questions answered, find someone that will give you an answer and show you the reasons for that answer.

Comments

10 Responses to “SCAMS/FRAUD in today’s real estate and mortgage industry”

San Jose CA broker linked to FRAUD claims over $2 million : My Home is my Investment on August 7th, 2007 5:39 pm

[...] is an update to my previous posting in which I gave a brief explanation about the talk amongst many families mainly in the east side of [...]
Christian Neri on January 8th, 2008 4:40 pm

My brother left to Toluca Mexico from all the Millions he made. He is living like king driving his FERRARI And BENTLEY that he has not paid for. He also bought a beach front house in Cancoon Mexico. He is happy living FAT with his wife Gloria Alvarez next to him. He opened up a CENTURY 21 Office in MEXICO. I am proud to be his brother because he made out like a BANDIT.

Christian NERI
mike montuvio on January 16th, 2008 3:48 pm

I doubt the last message is legit but what I know felipe neri’s license along with others from c21 su casa dont have their license anymore. The other agents are gloria alvarez and gilberto neri.
john on April 14th, 2008 12:34 pm

does anyone know if Bic Pho was related in any way to Paris Investments, LLC?
Ney on April 16th, 2008 4:27 pm

John,
I have not heard of Paris Investments nor do I know if they are in any way related to Bic Pho and his ring of scam artists. I know Bic Pho still owns or co-owns some other real estate brokerages besides C21 Su Casa in San Jose that are still operating.
Former Century 21 Su Casa Agent arrested in San Jose California - Real Estate on June 24th, 2008 3:10 pm

[...] under investigation for complaints and accusations of fraud is the Century 21 Su Casa brokerage, its many affiliated companies and agents as reported in 2007. But the first top agent, from the now closed Su Casa brokerage, to [...]
Joe on June 28th, 2008 6:29 am

The question i have is… Since Neri took off to Mexico and living large. Can he be brought to justice from Mexico? Can Neri be serve?
“Fear not a pack of lions led by a dear but fear a pack or dears led by a lion” It’s the leaders responsibility to supervise and discipline. If the leader couldn’t do his job, why insist on hiring and adding people he wasnt’ going to be able to supervise.
I believe that all this problems comes from the top. I mean from the very top, Century 21 franchise pressuring for production, Mike Ferry sales training, Broker/owners recruiting, training and pushing agents for mass production, ignoring the fact that they’re dealing with people not just numbers. This industry needs better standards, how do you watch out from agents that have the “su casa” desease? DRE doesn’t have public employment track record for each agent.
There goes my 2 cents.
Ney on June 30th, 2008 12:09 pm

Joe,
I dont know if Neri could be brought back from Mexico. I imagine that if the FBI is involved they may be able to do such thing. May be Felipe Neri will be more willing to come back to the US now that Gloria Alvarez was arrested after hidding in Mexico.

As far as the leader, in this case that would be Bic Pho. And as you have read, the accusations state that he was the main culprit.

The stories I have heard from (ex) Su Casa agents not involved in the accusations, Bic Pho and the Su Casa company would give their agents monetary incentives if they closed a deal using one of his many other companies like: Mariposa Mortgage, Online Termite and others.

According to one newspaper article, other C21 franchisees complained to the main corporate C21 offices about “Su Casa” but who knows what really happened and why it took so long for Century 21 (franchisor) to pull the plug on “Su Casa.”

One thing that I know from personal experience with past clients from (ex) Su Casa agents is that some moved together to other companies directly or indirectly linked to Bic Pho & Su Casa, others left and went to work for other companies but until the victims report them to the DRE and other agencies, they will continue to work.

The DRE is investigating Su Casa, Mariposa Mortgage, and several other agents. These agents already have a notation on their license that shows that they are under investigation by the DRE. You can see it by visiting the DRE public license search page and inputting their names. Here you will see a comment code “H-10082 SF”. If you call the DRE and ask about this code they can tell you who are in that list of people being investigated by the DRE.
Yoka on August 31st, 2008 3:38 pm

Nye, Here could be another possible fraudby these dishonest realtors: Triple Net Commercial Network Inc., as registered with the DRE does not exist when searched with the California Business Portal, see below.

Corporations (domestic stock, domestic nonprofit and qualified foreign corporations) Enter the complete or partial name of the corporate record you wish to search and select “Search”:
Triple Net Commercial Network Inc
No results matched the search term : “Triple Net Commercial Network Inc”
Apparent Fraud Spills from Century21 SuCasa to Another Agent in San Jose : San Jose-Santa Clara County Real Estate UNCENSORED on October 22nd, 2008 10:42 am

[...] course Norma Valdovinos, just like Felipe Neri did with his involvement in the lawsuit with Century 21 Su Casa, began putting the blame on everybody else but her self. In legal filings, Ms. Tran and Ms. [...]