Normally, we all recognize scam emails trying to swindle money. Typically, these mass emails claim to be foreign heads-of-state who want to deposit millions of dollars in YOUR bank account.  We hit the “delete” button and forget about them.  Well, my office was recently targeted for a more sophisticated real estate scam.  In this case, it was not just a mass email.  The culprit, “Dr. Chang Wong” filled out a detailed property search form that gave us pause:

NameAddress:  Dr. Chang Wong

Banshan County, Gongshu Dct, Hangzhou Zhejiang 310022

PriceRange:  $500,000.00USD to $900,000.00USD

Comments:  Dear Sir/Madam,

I am Dr. Chang Wong The Chief Financial Officer for Cnooc Limited, China. We are currently looking to buy a house in  any nice neighborhood for our Retering president of our company.

We are currently looking to buy a four (4) to six  bed rooms house with the price ranging from $500,000.00USD to $900,000.00USD and we would want to retain your lawyer in all the process buying the property e.g. documentation and payment. Please if you have properties with similar description please contact me as soon as possible so that we can make arrangement for the payment and all paper work. My client is willing to make a full payment of any choosing property. Please contact me at my email: changwong_cnooclimited@asia.com

I was not sure if this was a fake, so we initially treated the lead as real.  One of my team members sent Dr. Wong a list of homes, and he corresponded back by email.  He picked an $850,000 house in Santa Rosa Beach, Florida, and asked for names of attorneys to represent him.  Again, communicating by email, he picked one of the local law firms and wanted to solidify a contract.  All along, we were suspicious this might be a scam, but a bit optimistic.  Dr. Wong could be an international jet-setter that just buys homes without viewing them, right?

The next clue that Dr. Wong might be a scam-artist came was undeniable.  Read his email:

BUYER AND SELLER AGREE TO DEPOSIT $300,000.00 AGAINST THE PROPERTY, CHECK TO BE SENT BY STOCKBROKER. BUYER WILL ADD ADDITIONAL $200,000.00 TOTAL $500,000.00 THIS MONEY WILL BE USE TO BUY A NEW APPLIANCES FOR THE PROPERTY, ALL THE MONEYS IN THE LAWYER COMPANY’S TRUST ACCOUNT BUYER AND SELLER AGREE TO ALLOW THE LAWYERS TO DISPERSE MONEYS AT THE BUYERS REQUEST; A MINIMUM OF $300,000.00 MUST STAY IN THE LAWYERS COMPANY TRUST ACCOUNT UNTIL SAID TRANSACTION CLOSES. BUYER HERE BY REMOVE ANY ALL CONTINGENCIES ON SAID PURCHASE AGREEMENT

$500,000 for new appliances, Dr. Wong? With  a “check” from your stockbroker, not wired funds?  That some “bank” will verify as authentic? OK, hold on!   Dr. Wong, appliances might only cost $10,000!  Were you thinking the excess $490,000 would be wired back to you in REAL AMERICAN DOLLARS.  BUSTED!! 

The local attorney contacted the FBI, and we learned that Dr. Wong is really in Nigeria (where else?).  Further, there is nothing the FBI can do, since it is practically untraceable and overseas. 

 So, be warned.  I have since found Dr. Wong on other real estate sites, filling out forms and making inquiries.  Don’t be the one who sells him a house.

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy’s Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Wendy is a short sale and pre-foreclosure specialist and has been featured in “Kiplinger Personal Finance Magazine” and “Florida Realtor Magazine”. Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

Fannie Rolls Out ‘Deed for Lease’ Program

Fannie Mae has rolled out a new program under which it will offer market-rate leases for terms of up to a year to troubled borrowers who turn over the deeds to their homes. The company offered no estimates on how many borrowers it thinks might use the program. The GSE’s “Deed for Lease” effort is designed for homeowners headed toward foreclosure that do not qualify for loan modifications. They must document that the market rate rent does not exceed 31% of their gross income. Buyers of foreclosed properties are to assume the leases. Since January, Fannie has offered month-to-month leases to tenants whose landlords have lost their properties to foreclosure. Freddie Mac has offered month-to-month leases to both tenants and former borrowers since March. To date, neither effort has generated much use. Last month, Fannie said it had executed just 200 leases to date.

For more valuable information on how to stop foreclosure, check out our Help for Homeowners page at http://firsttimehome.us

Homeownership is one of the biggest dreams of many Americans.  Due to record numbers of homeownership and cheap mortgage rates, many homeowners are prime targets for scams.  Therefore, I’d like to take the opportunity to point out three of the top current real estate scams to help homeowners, buyers and sellers from losing thousands of dollars or their home.

The top three real estate scams that can be found right now include identity theft via mortgage request, loan flipping and the old bait and switch.

The bait and switch technique is a fraudulent method where a loan product is publicized at a beneficial rate (bait).  Later, the product or rate is subsequently changed for the gain of the lender (switch).  For example, one interest rate is guaranteed to you at the time of selling a loan, but a higer rate is given at the time of closing.  This practice is deceitful and illegal.

When obtaining a mortgage quote or getting pre-approved for a mortgage, many consumers believe that their financial details are secure.  However, on many occasions, your financial details can be hacked within 24 hours of your credit bureau inquiry and even your loan officer is unaware of your financial details being swiped away.

Loan flipping is another type of mortgage scam that is common in the real estate industry.  Loan flipping denotes frequent refinancing of a mortgage within a short time, giving very small gains to the borrower.  Lenders who flip loans ask too much for an origination fee with every consecutive refinancing.  These fees are usually asked for based on the whole loan amount, not only on the increased amount summed up with the loan principal through refinancing.

If you are considering a mortgage refinance, a home equity loan or buying a home, you should find a lender you can trust.  It is very important to shop around and do your homework before making a final decision and never give your personal details until you are confident that the individual or company you are talking to is someone you can trust.

To protect yourself from being scammed, the best offense is a good defense.  Research and make inquiries often.

Keller Williams Arizona Living Realty ~ Realtor® Cheryl Westwood

Search the Lake Havasu City, Arizona MLS

AP – Tens of thousands of people may have taken advantage of the first-time home buyer tax credit to defraud the government, an IRS watchdog office said Thursday, in testimony that could jeopardize efforts to extend the popular program.

More info

Top 5 Cities Where Home Prices are Hitting Bottom

1. Las Vegas, Nev.
Las Vegas-Paradise-Pahrump, Nev., Combined Statistical Area
Change: 24 percentage points
Homes with Price Reductions, 1/1/2009: 54%
Homes with Price Reductions, 9/11/2009: 30%
Moody’s Economy.com forecasts that five years from now, home prices in Las Vegas will have risen by 3.53%

2. Phoenix, Ariz.
Phoenix Lake-Cedar Ridge, CA Metropolitan Statistical Area
Change: 18 percentage points
Homes with Price Reductions, 1/1/2009: 58%
Homes with Price Reductions, 9/11/2009: 40%
Moody’s Economy.com forecasts that five years from now, home prices in Phoenix will have risen by 7.44%

3. San Diego, Calif.
San Diego-Carlsbad-San Marcos, Calif., Metropolitan Statistical Area
Change: 15 percentage points
Homes with Price Reductions, 1/1/2009: 45%
Homes with Price Reductions, 9/11/2009: 30%
Moody’s Economy.com forecasts that five years from now, home prices in San Diego will have risen by 25.41%

4. Miami, Fla.
Miami-Fort Lauderdale-Miami Beach, Fla. Metropolitan Statistical Area
Change : 12 percentage points
Homes with Price Reductions, 1/1/2009: 43%
Homes with Price Reductions, 9/11/2009: 31%
Moody’s Economy.com forecasts that five years from now, home prices in Miami will have dropped by -2.93%

5. Los Angeles, Calif.
Los Angeles-Long Beach-Riverside, Calif., Combined Statistical Area
Change: 10 percentage points
Homes with Price Reductions, 1/1/2009: 45%
Homes with Price Reductions, 9/11/2009: 35%
Moody’s Economy.com forecasts that five years from now, home prices in Los Angeles will have risen by 12.36%

If you’re a homeowner facing foreclosure and have tried talking to your mortgage company about a loan modification or short sale, then this article will give you a hint as to why.

Help Wanted: Wells Fargo Bank Loss Mitigation Department is seeking an experienced professional in loss mitigation or loan modification/short sale department. Must be detail oriented, capable of managing multiple tasks and processing loan modification packages. Able to document conversations with borrowers so that Senior Management is not “thrown under the bus” during litigation.

Founding Partner and REALTOR® Carol Dean Davis  of Atlanta Fine Homes Sotheby’s International Realty was interviewed by the TODAY show.

Please click on the photo to see the interview.

Some of what I received for some of the 4000 dollars I paid, these very colorful books that were never used during "the mentoring"

For those of you out there that may be excited about the John Beck Free and Clear Real Estate investing, As I was.  I thought I might save you the trouble and thousands of dollars.  John Beck Real estate investing is in my opinion a scam.  What he seems to be really after is your money in a different way I didn’t find anything in this system that you couldn’t look on the internet for free to get. 

How it starts:

After you purchase the tv addJohn Beck’s free and clear system for I believe I paid 39.99.  About a month latery Someone will call you and tell you that they want you to learn from them how to make lots of money, that you don’t need more than a thousand to start because you will be using other peoples money but theres the SALE that you have to decide fast because they only choose a few so that you can be financially independent. I was told it would cost me only 2900( there was more money needed) for the classes and information to make me successful and don’t worry I could get that back within the first month for sure.  You are then told that you will be given a Mentor to go one on one with you to walk you thru until you sell your first home.  and help you succeed it realestate because it’s great for their business when others really succeed that they can record it for T.V because the “Government” regulates them.  I was told I would be giving a personal Mentor that was very successful. I even asked that they give me one that makes millions. After I purchased the class  ( I was giving an agent that (I later found out) was taking classes on how to teach people about the John Beck Free And Clear System.  Hmmm if he’s rich why did he need to go to school to become a teacher?  Did I get a walk thru? NO what I got was 4 quickly rushed classes of how to look on the internet to find counties with distressed properties or forclosures or unpaid tax properties, This is not as easy as they tell you it is.  Then they give you names of popular auction sites to sell homes and buy homes ( everyone knows about these sites FOR FREE).   But they do give you these very special passcodes n to websites that lead you to information that you could get yourself for free.

What It Really Is In My Opinion

This system is a way to sell classes for John becks System. I paid over 4000 after every different thing was added that was suppose to help me succeed.  I don’t think it’s about selling homes but more about selling classes on buying and selling homes.  Most of this information could be found on the internet for under 20$ or for free if you use your telephone.  I asked the mentor right away when I could sell a home because I was told my mentor would walk me thru my first home purchase and I wanted him to help me buy and sell the first one. He told me I had to go thru at least 3 classes before he could do that.  You know where this is leading right? you guessed it he never walked me thru my first home buying and selling.  I really didn’t know anymore about buying and selling realestate than what I read on my own. When I called to complain those once friendly helpful people were quickly no longer answering my phone calls or they now had taken on these rude tones of well maybe you should pay for the class and go thru it again for more mentoring ( are you serious?!) good luck.  Not only that it’s not that easy to find homes  1000 dollars.  It really will take someone who already has lots of money to buy these homes worth buying and they don’t need to spend 4000 on this system to do it. 

My sincere advise

Stay away from the John Beck system it seems to be no more than a scam to sell thousand dollar classes.  Save yourself time and thousands of dollars.  And for those who were too late to be warned .  I think a class action lawsuit would be something that should be considered please contact me if this has happened to you.  Inside Edition investigation found out they were using a photo of someone’s home on their T.V informercials  that was not lost in forclore or back taxes she was actually living in it.

INSIDE EDITION INVESTIGATION VIDEO: http://www.insideedition.com/news.aspx?storyID=2885

The site: http://www.johnbeck.net/

Ok, this may not be a scam but if it looks like a duck and quacks like a duck?

We just came out of a “boom” that was in part created because we sold and financed homes to families that were ill-equipped financially to meet the obligations they signed up for. If you truly have a financial hardship, your focus should be on defeating the hardship, getting your financial world on solid footing and then preparing to become a homeowner again.

Short Sale can be a good alternative to foreclosure, but don’t let someone create unrealistic expectations for you. The Internet and computers give lenders access to so much more information now than even three years ago, so very little can “slip through the cracks”.

Buying a home, should NOT be about “slipping through the cracks”, it’s about the many years of enjoyment and the memories you will have. Chances are the “crack” you just slipped through will end up the size of an earthquake fault and you’ll be doing a lot more falling than slipping.

If you or someone you know is facing foreclosure, we CAN help! We won’t guarantee you can keep your home but we CAN help you find the best solution for you and your family.

We can be reached via email: homeownerinfo@verizon.net

This week I spoke to my friend who was telling me a story about his friend and how he got taken for $12,000…. Two couples bought the same foreclosure and were handed the same set of keys to a home that was in foreclosure. One couple lost $12,000 and the other $25,000. That’s $35,000 off one home.

RULE #1, just because the home is vacant does not mean the home has been completely foreclosed on.  Don’t trust anyone….This post is to EDUCATE consumers on how to know if you are dealing with professionals or scam artist. Here are some steps to help you so you don’t get taken.

1. Check the validity of the so called Realtor, you want to double check that information first before moving forward. In California you can check the status of a real estate agents license at this site.

2. Next, you will want to check the status of the home to determine who owns the home. That information is public record, you can Google the Assessors Office of your particular county. If you have trouble post a comment and I will help you.

3. When the offer is accepted or so called offer is accepted an Escrow needs to be opened, be very careful if the realtor tells you that THEY WILL HANDLE EVERYTHING! Normally, the bank will have an escrow company that they have an agreement with. Call and speak to the Escrow Officer personally, visit the escrow company and cross reference the escrow office by searching on Google. Also check with the BBB.org, NEVER give anyone cash or write a check to anyone personally…An escrow company SHOULD NEVER have you write a check to anyone other than the Escrow company. Same goes for the lender or real estate office.

4. When it comes to ordering your inspection, you order it yourself personally, you do the search for a ligitamate inspector.

5.  For the financing or the mortgage loan, again Google the mortgage company, visit the office, be very alert if the realtor, loan company and escrow are all in the same building. I know it sounds elementary but people are getting scammed.

People, be very alert, do your home work, if it sounds to good to be true then it is. If it sounds like too much work rememeber your savings is at stake. These con artist are putting up shop and taking peoples savings. Call a local realtor like my preferred realtor Connor and Paris Macivor with www.paris911.com they can help you do the leg work.  Call a reputable real estate office and have someone double check the work. I know it sucks but there are scum out there….Again DON’T TRUST ANYONE, verify everything don’t leave it to chance. I was so sick that I had to write this post. God Bless.

There has been a lot of negative press and misinformation lately about double–closings. Many people have been indicted recently under what the press has labeled “Property Flipping Scams.” Misinformed lenders, real estate agents and title companies will tell you that double–closings are now illegal. In fact, they are nothing of the sort. A double closing is simply two back–to–back closings wherein the proceeds from the second closing is used to fund the first closing. Both closings are done in escrow so that the “middleman” can buy and resell a property for profit without using any of his own cash. The middleman profits because he buys the property below market and resells it for market price. This process has been done tens of thousands of times over the last 100 years – legally, ethically and PROFITABLY! The so–called “illegal property–flipping schemes” work as follows: unscrupulous investors buy cheap, run–down properties in mostly low–income neighborhoods. They do shoddy renovations to the properties and sell them to unsophisticated buyers at inflated prices. In most cases, the investor, appraiser and mortgage broker conspire by submitting fraudulent loan documents and a bogus appraisal. The end result is a buyer that paid too much for a house and cannot afford the loan. Since many of these loans are insured by the Federal Housing Authority (FHA), the government authorities have investigated this practice and arrested many of the parties involved. Despite the negative press, neither flipping nor double–closings are illegal. The activities described above simply amount to loan fraud, nothing more. Newspapers have inappropriately reported the activity as illegal “property flipping,” rather than simply “loan fraud.” So, whenever you hear a real estate agent or mortgage broker say, “flipping is illegal”, you know they are misinformed. The misunderstanding of the flipping business has not been without consequence. Many title and escrow companies simply will not do a double–closing. Fortunately, there’s many that still do double closings, but they are also keeping a close eye on potential fraud (as they should). Some lenders have placed “seasoning” requirements on the seller’s ownership. If the seller has not owned the property for at least six months, the lender will assume that the deal is fishy and refuse to fund the buyer’s loan. This may be a problem if you bought a property cheap and are reselling it quickly for a profit (the good, old American way!). This should not be confused with LAW – it is simply an underwriting guideline for some lenders. Of course, guidelines are just that – by going up the chain of command, you can generally get approval from loan underwriting by showing the property is being resold for a higher price because either it was purchased in a distress situation (e.g., foreclosure) or that substantial repairs were made. Keep good records of your repairs to show to the lender. If the buyer is getting an FHA insured loan, there is no way around the “seasoning” issue. FHA regulations prohibit the funding of a purchase where the seller has not owned the property for at least 90 days, NO EXCEPTIONS. This generally should not be a problem in a fix–and–flip situation, since it will likely take you 90 days by the time you acquire, rehab and sell. But, if you are planning on buying the property and reselling it in a double–closing, the end–buyer CANNOT go with an FHA loan.

BRONCHICK’S RULE: ALWAYS REMAIN IN CONTROL OF YOUR DEALS! A smart investor should stay on top of the process and anticipate these issues. If you are buying a property and reselling it quickly, particularly in a double closing situation, you must anticipate this problem and deal with it. Let the buyer, his real estate agent and his lender know that there may be a seasoning issue. If you stay in control of the loan process and steer your buyers to a mortgage company that doesn’t have a hang–up with double–closings, then seasoning won’t become an issue. Generally speaking, only FHA and subprime lenders have the “seasoning hang up” – FNMA underwriting guidelines do not prohibit funding a purchase money loan where the seller has not owned the property for a minimum period of time. If you do get into a last–minute jam in a double–closing situation, there is a solution, which is called a “reverse assignment.” You simply assign your contract with the end–buyer back to the owner and step out of the deal. Your “consideration” for doing so, is the profit you would have otherwise made. This consideration can be documented in writing and secured by a lien on the owner’s property to be paid to you at closing.

Jen Tra – Google Profile

This is the profile of a highly respected mortgage expert in the area. She has helped many people by giving good advice on Irvine mortgage . I think that she is truly to be admire for her work in the refinance industry.

According to a report release today, the number of new loan applications for the month of March fell slightly. I think is this due to many people sitting on the fence as they wait for lower interest rate. We will start to see higher numbers going into the months of April and May as more home buying takes place in spring. Remember if you thinking about buying you have to know about mortgages.  Vist <A HREF=”http://www.irvinemortgage.org/”>Irvine Mortgage</A> for more info.

So you’ve seen your umpteenth infomercial with the guy in his neatly pressed button-upped white T-Shirt grinning ear to ear waving his rock-solid no-money-down rags-to-riches real estate investment course for 3 easy payments of a gazillion dollars (but only if you call now) and now you are thinking, “wow this looks like a great deal, I better get it fast before the special offer expires.” You notice how there’s always a special offer? Anyway, I am not saying this guy isn’t telling the truth, however regardless of which course or school of thought you buy into there are several key areas that one must avoid when engaging in any real estate related transaction.

Pitfall Number 1: Don’t Overpay!

The whole point in investing is to find properties that are undervalued. How does one find out what is undervalued versus overvalued? Without getting into technical details, the bottom line is you need experience. Yes much like shopping for anything else, real estate is essentially one of the highest ticket items in the shopping center of life. It’s advisable to stick with one market, perhaps the one closest to you in proximity as a starting off point. Through your experience and asking the right questions, you will eventually have a feel for the pulse of the market you are looking after, and of course identify what is considered a good buy.

Pitfall Number 2: Know the Market

Yes, you are actually going to have to do more work! This part is really common sense though, but executing it where the beauty and the payoff comes in. How do you make money in real estate? The most basic way is to buy low and sell high. So from the first step, you have identified general trends in the value of homes, and are pretty good at spotting undervalued homes. Assuming you acquire that home, you may want to profit from it by selling it off to someone else for a higher price. How can you do this? Well there are many ways. For one, most markets appreciate in value over time so if you want a longer term approach that will work. Making upgrades to the property will automatically raise the price of the home as well. Think in terms of what the market wants, not what you personally want. You aren’t the one buying it; you are trying to sell it to someone else for a higher price than you bought it.

Pitfall Number 3: Know Your Budget

It may be a fine philosophy to go through life on a whim, but real estate is serious business, and thus diligent financial planning and budgeting is critical to your success. Don’t worry you don’t need to be a finance geek, however you need to be disciplined and know your budget from the onset, or you may be finding you are learning that you need to make certain renovations or upgrades, and didn’t anticipate it going over to a certain cost. Think ahead as to what is needed before actually going forth with investing in real estate.

Are the nation’s economic problems – the financial crisis, the mortgage meltdown, the tidal wave of foreclosures, soaring gas prices, increasing job losses, and a tumbling dollar — only in our minds?

It appears that Phil Gramm, John McCain’s chief economic advisor and co-chair of his presidential campaign, thinks so.

He also thinks that those of us who are seriously troubled by the state of the economy are “whiners.”

In an interview in yesterday’s Washington Times, Gramm said that “this is a mental recession. We may have a recession; we haven’t had one yet.”

Gramm says that Americans have “become a nation of whiners.” 

Americans, according to Gramm, are constantly “complaining about a loss of competitiveness, America in decline.”

“You just hear this constant whining,” he said.  “Misery sells newspapers,” Gramm said.  ”Thank God the economy is not as bad as you read in the newspaper every day.”

What also sells newspapers are bone-head comments from key advisors to presidential campaigns.

We said last month that Gramm was on thin ice in the McCain campaign because of his ties to the mortgage meltdown and financial crisis. 

As a U.S. Senator from Texas, Gramm spearheaded sweeping changes in federal banking law, including the Gramm-Leach-Bliley Act in 1999, which repealed previous rules separating banking, insurance and brokerage activities, and which some analysts blame for creating the legal framework for the current mortgage meltdown and credit crisis.  For that effort, Gramm has been called “the father of the mortgage meltdown and financial crisis.”

In addition, Gramm is currently vice chairman of UBS, the giant Swiss bank that has been a major player in the U.S. subprime mortgage crisis.  While advising the McCain campaign, Gramm was paid by UBS to lobby Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages.

Gramm’s leadership role in UBS – whose stock has fallen 70 percent from last year — also raises questions about his economic, and not just his political, judgment. 

As a recent article in Slate.com observes, “UBS’s investment banking unit made disastrous forays into subprime lending. Last December, having already announced a third-quarter loss, UBS raised about $13 billion to replenish its balance sheets, mostly from the Government of Singapore Investment Corp.  In the fourth quarter of 2007 and the first quarter of 2008, it racked up Mont Blanc-sized losses on subprime debt of nearly $32 billion. In May, it sold about $15 billion worth of mortgage-related assets to the investment firm BlackRock — but only after it agreed to finance most of the purchase price. In June, UBS raised another $15.5 billion in a rights offering. The credit losses — some $38 billion so far, according to UBS — caused the bank to replace its chairman and install new leadership at its investment bank.”

In addition, Massachusetts has charged UBS with defrauding customers who had purchased auction-rate securities. UBS is accused of “selling retail brokerage customers products that turned out to be profitable for the bank’s investment banking unit but caused the customers to suffer significant losses.”

UBS is also the subject of an ongoing federal investigation, in which Bradley Birkenfeld, an American UBS private banker who was busted on tax evasion charges, has plead guilty and is cooperating. 

UBS has also recently paid millions of dollars to settle a lawsuit with the victims of a 1031 exchange scam.  UBS was one of several defendants who were alleged to have participated with Donald Kay McGahn and and others in a scheme to steal the money that had been entrusted to them to facilitate tax deferred 1031 exchanges.

And most recently, the Financial Times, which called UBS “Europe’s biggest casualty of the US subprime crisis,” reported that UBS’s write-downs could total another $7.5 billion.  UBS’s stock fell 7 percent in trading on Monday.

With that resume, we think it would be best for everyone, not least John McCain, if Phil Gramm was no longer introduced to voters as “John McCain’s chief economic advisor.”

UPDATE:

As of July 18, Gramm has resigned as co-chair of McCain;s presidential campaign.

Here’s a story about greed, power and sex that’s a mixture of The Da Vinci Code, Bonfire of the Vanities, Moliere’s Tartuffe and Herman Melville’s The Confidence Man. 

It is about a scam and a scammer.

We’ve written about scams and how to avoid them. 

We don’t like scammers, especially those who prey on the desperate and the vulnerable, such as people facing foreclosure. 

But sometimes a scammer is so outrageous, so inventive, so over-the-top, and his victims so well-heeled and incredulous, that we have to admit at least an ambivalent admiration.

One such scammer is Raffaello Follieri, one of the very few scammers we’ve seen who deserves the name con-artist.

Follieri’s story reads more like a novel than a crime report.

For months, Americans who were in-the-know knew Follieri as a suave and sophisticated Italian businessman, real estate mogul, socialite, philanthropist, and Vatican representative.

He was none of these, except Italian.

Using charm, good looks, unbelievable gall, and a network of gullible and greedy New York socialites, Washington insiders and Hollywood A-list connections, Follieri moved easily in exclusive circles of money, power, and glamor. He lived in a $40,000 a month Fifth Avenue apartment and travelled the world, going to parties, conferring with the Pope (he said), and receiving awards for his generosity. 

Among those who fell under Follieri’s spell was actress Anne Hathaway.

Another was billionaire entrepreneur Ron Burkle, Burkle’s investment business Yucaipa Companies LLC, as well as Burkle’s friend, former President Bill Clinton.

Then the scam collapsed.

According to the New York Times,  “Raffaello Follieri, from San Giovanni Rotondo on the spur of Italy’s boot, is alive and kicking in his $40,000-a-month duplex on Fifth Avenue. Age 29, he used empty claims of church ties to befriend Douglas Band, a top aide to Bill Clinton. Band then smoothed the way to Clinton’s moneyed entourage, including the California billionaire Ronald Burkle.”

“Mr. Follieri received an onstage thanks from Mr. Clinton after pledging $50 million to the Clinton Global Initiative. The money has not been paid.”

“Mr. Follieri’s business cachet — his link to the Catholic Church — was contrived, the government said. It consisted of an administrative employee at the Vatican whom he paid.”

“Mr. Follieri also hired a relative of a former Vatican official as well as his own father, claiming that his father had a special relationship with the Vatican. In an apparent effort to build ostensible ties to the church, Mr. Follieri also met with clergy and traveled with a monsignor.”

In another story, the Times further explains that “Attractive and charming, [Follieri] rapidly moved into the world of billionaires and political figures. His entree was helped when he met and befriended Douglas Band, a top aide to Bill Clinton who brought Mr. Follieri into contact with the former president and Mr. Burkle.”

“That relationship birthed the unhappy union of Burkle’s Yucaipa investment operation, of which Clinton is a senior adviser, and the Follieri Group in a venture to acquire Catholic Church property Follieri said he’d get on the cheap.”

“From mid-2005, Burkle plowed $55.6 million into this enterprise, only to conclude Follieri was devoting a chunk of it to good living. A suit filed by Yucaipa in Delaware in May contends Follieri has been ’systematically misappropriating the assets’ to indulge in ‘massive charges for five-star lodging’, ‘dog care’ and ‘inappropriate jet travel’ for himself and ‘his actress girlfriend’.  That’s Anne Hathaway, of The Devil Wears Prada.”

Burkle’s lawsuit against Follieri was dismissed after Follieri agreed to pay back more than $1.3 million.

Then, last week, Follieri was arrested in New York and charged with 12 counts of fraud and money laundering.  He could get life in prison.

The charges against Follieri include:

• Six counts of wire fraud and each count carries a maximum sentence of 20 years in prison.
• Five counts of money laundering with each count  carrying a maximum sentence of 20 years in jail.
• One count of conspiracy to commit wire fraud, which carries a maximum penalty of 5 years behind bars.

According to the press release from the U.S. Attorney’s Office, “From June 2005 through June 2007, FOLLIERI ran a fraudulent real estate investment scheme, falsely claiming that he had close connections with the Vatican that enabled him to purchase Catholic Church properties in the United States at a substantial discount. FOLLIERI claimed that the Vatican formally appointed him to manage its financial affairs and that he met with the Pope in person when he visited Rome, Italy.”

“In reality, FOLLIERI’s connections consisted of an administrative employee at the Vatican who was paid by FOLLIERI; FOLLIERI’s hiring of a relative of a former Vatican official; meetings with clergy, FOLLIERI’s travels with monsignors; and a reporter for a news publication in Italy. None of these connections entitled FOLLIERI to purchase Church real estate at below-market rates.”

“Based on his fraudulent representations about his ties to the Vatican, FOLLIERI was able to access and misappropriate hundreds of thousands of dollars in investor money to live a luxurious lifestyle, including expensive restaurants and clothes;dog walking services; an opulent apartment in Manhattan that leased for approximately $37,000 per month, overlooked Rockefeller Center, and had views of Central Park; medical expenses for his girlfriend at the time and his parents,including a “house call” by FOLLIERI’s physician which cost privately chartered airplanes to various locations around the world.”

“In addition, FOLLIERI stole money from an investor by falsely claiming, among other things, that FOLLIERI needed money for an office in Italy that did not exist, and claimed that he spent over $800,000 for “engineering reports” relating to real estate that did not reflect engineering work and were almost worthless. FOLLIERI caused hundreds of thousands of dollars in fraudulently obtained proceeds to be wired to a bank account in Monaco that he controlled in order to hide and conceal the source and control of the funds. From late 2006 through early 2007,FOLLIERI’s scheme started to unravel, and FOLLIERI’s principal investor cut its ties to FOLLIERI and fired him.”

The Times reports that “Judge Henry B. Pitman set bail at $21 million, to be secured by $16 million in cash and property and guaranteed by five financially responsible persons. Mr. Follieri had to surrender all travel documents and was ordered confined to his home in Manhattan with the exception of legal, religious and medical needs. Any trips must be made with an electronic-monitoring device.”

And Anne Hathaway has gotten smart and is no longer taking his phone calls.

There are a lot of real estate scams out there and many of them are now offering the bait of making easy money in the foreclosure market.

Scammers like to run with the hot trend – and right now the hot trend in real estate is foreclosures and distressed property.

Of course, there is money to be made by investing in distressed and foreclosed real estate.

But as with any other kind of investing, making money in distressed property and foreclosures requires significant expertise and experience and adequate capitalization. 

Before you trust your money to a stranger who tells you he has a sure-fire way to make lots of cash by investing in the hot, once-in-a-lifetime foreclosure and distressed property market, make sure that he has the expertise and experience and the capital (not just yours!) to back up his claims.

Here are 10 tips to avoid being taken in by scammers who promise you quick and easy returns on your real estate investment:

1. Be very skeptical and ask lots of questions. 

2. Get the names of the people who will be running the investment fund.  In particular, get the names of the people who will be making the investment decisions.  Demand that they tell you their business and investment track record and that they provide you with documentation of their claims. 

3. Check their qualifications.  Make sure that they are licensed securities or real estate professionals and not just telemarketers. 

4. Research all the names you get.  Use the Internet.  Do a google search for the investment fund and for anyone involved in the fund or business.  Search for their names and the name of the investment fund on scam.com, the Securities Fraud Search Engine, and  other community web sites and bulletin boards, as well as the Better Business Bureau.  Also check their names with your state Attorney General and the Securities and Exchange Commission.  Carefully read the online material on telemarketing fraud put out by the U.S. Department of Justice. 

5. Find out whether the people raising the money for the investment fund are licensed securities brokers.  If not, don’t invest.  You can check their broker status here.

6. Before you invest, get the advice of people you trust.  Ask your attorney, your real estate broker, your financial advisor, and your adult children what they think about the investment.  On the other hand, avoid pressure from relatives and friends to invest in “can’t miss” schemes.

7. Get all promises or claims in writing and save copies of the paperwork. Verbal agreements don’t mean anything. Demand documents and then review them carefully.  Ask your attorney, your real estate broker, your financial advisor, and your adult children to review them as well.  Even when you get promises in writing, remain skeptical, especially regarding revenue projections.  At best, these projections are guesses; at worst, they’re outright lies.  Be particularly skeptical about projections in a business plan.  Remember that a business plan is not a legal document — you can put anything you want in a business plan and scammers always do.

8. Take your time before deciding whether to invest.  Scammers use lots of tactics to pressure you to make a decision.  Don’t let anyone rush you into an investment.  If they tell you, “only a few lucky investors can get in, so you must act right away,” it is almost certainly a scam.

9. Demand to know how much of your investment, or the total fund raise, is actually going to purchase property and how much is going to pay the people who are raising the money.  Don’t trust any investment where more than 10-15 percent of the total raise is going into the pockets of the fund-raisers. 

10. Live by the rule: If something sounds too good to be true, it probably isn’t.  If someone tells you that there is a “guaranteed return on your investment,”  it is almost certain that you should invest your money somewhere else.  Scammers play on greed and fear.  Deals that promise exceptional returns — and deals that must be done now — are the hallmarks of a scam.

Last March, we wrote about the federal indictment of 19 people for mortgage fraud-related offenses under what the government called “Operation Homewrecker.”

The indictment alleged that a scam operated by Charles Head, 33, of Los Angeles, California, along with 18 others under his direction, targeted homeowners in dire financial straits, and fraudulently obtained title to over 100 homes and stole millions of dollars through fraudulently obtained loans and mortgages.

Among the alleged conspirators was Elham Assadi, aka Elham Assadi Jouzani, aka Ely Assadi, 30, of Irvine, California.

In the past two weeks, many of our readers have found this blog by searching for the name Elham Assadi Jouzani (and, somewhat less frequently, by searching for Ely Assadi and Elham Assadi).

Who is Elham Assadi Jouzani?

Jouzani is alleged by federal prosecutors to have been part of a “foreclosure rescue” scam that netted approximately $6.7 million in fraudulently obtained funds taken from 47 homeowners, nearly all located in California.

The allegations are that from January 1, 2004 to March 14, 2006, the defendants contacted desperate homeowners, offering two “options” allowing them to avoid foreclosure and obtain thousands of dollars up-front to help pay mounting bills. If the homeowner could not qualify for the “ first option,” which virtually none could, they would be offered the “second option.” An “investor” would be added to the title of the home, to whom the homeowner would make a “rental” payment of an amount allegedly less than their mortgage payment, thereby allowing the homeowner to repair their credit by having the mortgage payments made in a timely fashion.

All of this was a scam.

The defendants recruited straw buyers as the “investors” who would then replace the homeowners on the titles of the properties without the homeowners’ knowledge. Once the straw buyer had title to the home, the defendants immediately applied for a mortgage to extract the maximum available equity from the home. The defendants would then share the proceeds of the ill-gotten equity and “rent” being paid by the victim homeowner.

When the defendants ultimately would sell the home, stop making the mortgage payment, and/or pursue an eviction proceeding, the victim homeowner was left without their home, equity, or credit.

These facts explain the interest in Operation Homewrecker.

But these facts don’t explain the recent particular interest in Jouzani.

We’ve searched the Internet ourselves, and we can’t find any reference to Elham Assadi, Ely Assadi, or Elham Assadi Jouzani outside of this case.

Nor can we find anything in the news that explains the current interest in Jouzani as compared to the other Operation Homewrecker conspirators.

If you’ve come to this blog by searching for Jouzani, please tell us why there is so much special interest in this particular Homewrecker.

And why the interest at this time?

We’d love to provide more reporting on Jouzani, so if you know something, please tell us so that we can pass it on to our readers.

Keith Brotemarkle, one of the people indicted with Charles Head in an alleged “equity stripping” scheme called Operation Homewrecker, was also involved in a reverse mortgage company called Reverse Mortgage Resources.

The company’s website ”invites qualified brokers to become Approved Reverse Mortgage Advisors” with Reverse Mortgage Resources.  It asks potential affiliated brokers “ Who did you speak with at Reverse Mortgage Resources?” 

One of the brokers listed as being at Reverse Mortgage Resources is Keith Brotemarkle.

Brotemarkle was allegedly a participant in Charles Head’s “equity stripping” scheme that netted approximately $5.9 million in stolen equity from 68 homeowners in states across the nation. Targeting distressed homeowners and defrauding mortgage lenders through the use of straw buyers, Head would receive approximately 97 percent of the stolen equity, while the other defendants received either the remaining 3 percent of equity or a salary from the fraudulently-obtained funding. The defendants used referrals from mortgage brokers to identify and solicit new victim homeowners, and also sent “blast faxes” to mortgage brokers throughout the country and mass emails to potential victims. Through misrepresentations and omissions, desperate homeowners would be offered what appeared to be their last best chance to save their homes. Victims were left without their homes, equity, or credit.

The FBI has recently announced that it has begun an investigation to the misuse of reverse mortgages.  Reverse mortgages release the equity in a property to the homeowner in one lump sum or multiple payments. The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves the home.  In the U.S., reverse mortgages are available for people 62 years old or older. Reverse mortgages are typically used to finance retirement or pay unexpected medical bills.  While reverse mortgages can make sense for seniors, the FBI is concerned about possible abusive sales practices that prey on seniors, such as aggressive and untruthful marketing and excessive fees.

Reverse Mortgage Resources is run by mortgage broker Don Marginson.  Its website states that it is located in Ranch Bernardo, California, and that it is “expanding again with offices to cover the Southeast and Northeast United States.”

We have no reason to believe that Reverse Mortgage Resources is not legitimate, and we would not want to assume that it is illegitimate simply because of its association with Brotemarkle.

But we would suggest that they remove Brotemarkle’s name from its website.