Short Sale Scammer Gets 90 Days in Jail
After an extensive investigation by the California Department of Real Estate and the office of the California attorney general, real estate salesman Matthew Wayne Stewart pled guilty to conspiracy to commit real estate fraud stemming from his actions in two short-sale transactions.
Among other charges, Stewart was accused of exceeding the compensation limitation by requiring the buyers to pay an additional 3 percent short-sale negotiation fee, which was not disclosed to the lenders or sellers.
As part of the plea, Steward was required to surrender his real estate license, serve 90 days in jail, pay restitution of approximately $25,000, and be on formal probation.
Federal authorities say three Southern California men have been indicted for allegedly running a scam involving short sales that caused more than $10 million in loses.
Federal search warrants were executed at homes and businesses in Los Angeles and Orange counties in connection with the schemes. Agents seized more than $1.7 million held in bank accounts, $548,937 in cash, two Bentleys and a Mercedes, and various jewels, officials said.
Given current market conditions and the large number of financially distressed homeowners, the potential for short-sale fraud is huge. Short-sale fraud takes many forms, and all forms have a deleterious effect on the market. To help combat short-sale fraud, the DRE has issued several consumer alerts to help educate consumers and real estate licensees alike.
How are you educating yourself in the new market of short sales?