It can be, in many cases, the act is considered to be a form of real estate fraud, when it is accompanied by fraudulently misrepresenting information to the client. In fact, it is recognized as one of the most commonly investigated and prosecuted scams after the burst of the real estate bubble in New York City.

How is the promise of evading foreclosure seen as fraud?

There is a sign of fraud when a foreclosure rescue consultant promises or guarantees a homeowner that he/she can save the property for just a fee. It is not possible to guarantee 100% that a thousand dollar up-front fee can stop foreclosure.

This thousand-dollar fee is usually paid after the housing consultant provides the prevention services such as modifying loans, advocating forbearance agreements or and short selling the property etc.

If the fee is demanded upfront before any foreclosure prevention services are provided, then the client might have reason to be suspicious of the consultant’s services. In most cases, the consultant may accept the lump sum payment, but neglect to negotiate to save the client’s property.

The first step of the investigation

After the alleged victim files a complaint against home consultant with the New York Attorney General’s Office, the first step is running the name through the system.  A simple background check with the U.S Department of Housing and Urban Development (HUD) by the Attorney General’s Office’s investigator can determine if the consultant is legitimate or not.

The New York State Attorney General’s Office’s real estate fraud investigators are trained to follow stringent investigation guidelines. Investigations are usually done in covert until sufficient evidence renders them ready to commence a criminal action or a civil fraud action.

Once a criminal investigator comes knocking on your home/office doors, it is important to stop talking to them and call a criminal defense attorney right away for legal advice.

If the New York State Attorney General’s office is currently conducting a criminal investigation or is filing a civil fraud action against you for real estate fraud, call our office at (212) 577-6677 for professional legal advice.