Richard Piatt reporting
New homes have been the subject of profit skimming during Utah's booming economy. Now that things aren't so good, the scam is being exposed. But there are new laws that could help.
Believe it or not, there were no laws against mortgage fraud until this year. But a lot of people agreed there should have been, and now there are.
New homes have been bought at one price, sold at an inflated price, and possibly sold again and again at still higher prices each time. That's the rough skeleton of the way real estate fraud has paid off for a few and has cost others millions of dollars.
"We know that home values that are based in artificiality distort the economy, and we're experiencing some of that," Gov. Jon Huntsman said.
Today, Huntsman drew attention to mortgage fraud with a pair of ceremonial bill signings. Together House Bill 346 and Senate Bill 134 make mortgage fraud illegal, impose tough penalties, pay for a special prosecutor, and revoke real estate licenses of the guilty.
"If you commit real estate fraud, you will not profit, and you will go to prison," said Chris Kyler, with the Utah Realtors Association.
The details of real estate scams vary in specifics. But in general, it is a red flag that you're getting sucked into one if you're pressured to lend someone your credit score for a loan, or if you are encouraged to lie or not disclose all the terms of a deal.
There could also be a question about who is living in the home. It is fraud if people say a home is their primary residence when it is not.
In the big picture, people in dozens of neighborhoods could be overpaying taxes because of overvaluation. Homes also could be sitting empty, sold several times with no one living there.
For a long time some legitimate lenders watched in disbelief as people justified lies to make big money. "Greed drives people to do things they wouldn't normally do," mortgage broker Kay Ashton said.
Sometimes mortgage fraud can ride very close to the edge of the law, but usually there is a string of elements involved that are each technically legal but that together create a shady situation.
E-mail: rpiatt@ksl.com
This week has been beautiful in Virginia with the spring weather! We no longer need to wear our coats and sun is shinning with blossoms everywhere. Because of the nicer weather, we decided to go to a Nationals baseball game at their new field in DC. The new stadium is huge and has a great view of the field no matter how high you sit. (We were sitting at the very very top.) You can even see the nations capitol in the distance. We had a great time at the game with our friends Jordan and Sara, even though the Nationals lost. :) A bonus to the whole night was to watch fireworks at the end of the game! The best adventure of the evening was walking to the metro after the game when it began to pour rain. We were drenched head to toe by the time we made it on the metro....good times!
Good times!
