Featured News 2013 Lawsuits and Investigations Highlight Kickbacks and Sham Agreements

Lawsuits and Investigations Highlight Kickbacks and Sham Agreements

When you purchased your home, did you have to sign papers where you agreed to pay fees for a variety of services? While some of these costs may have been warranted, there are also evidences that some of the charges you may have paid were unwarranted and unfair. The Washington Post says that there is a wave of lawsuits that are being processed all throughout the United States at present because of sham agreements in real estate purchases. Government organizations are investigating some of these sham agreements and prosecuting people who are overcharging homebuyers. Regulators and private lawyers have discovered that there are many kickbacks and sham agreements in real estate that can drive up the fees customers have to pay.

The Washington Post says that sham agreements and kickbacks became common in the housing boom prior to 2008. In the financial recession that followed, the amount of devious scams dwindled, but as the economy slowly improves it is important that individuals are on the alert for dangers. Recently, the U.S. Consumer Fraud and Protection Bureau announced that dour major mortgage insurers will pay $15.4 million in penalties to settle a complaint regarding unnecessary payments. The insurers were making kickback payments to mortgage lenders in exchange for business.

Another case in Maryland discussed a real estate agent who allegedly charged illicit payments to all clients. The case claims that the agent was able to secure hundreds of thousands of dollars from customers by charging them to send settlement business to a local title firm. The kickbacks violated a federal law which was created to protect home buyers from these inflated fees. At least 3,000 were harmed by the kickbacks in this case, and they are seeking a total of $11.2 million in damages. The agent in this Maryland case denies that he inflated fees and says that he will vigorously fight the homeowners. On his website claims to be a part of the number one real estate team in Maryland and the country, Long & Foster.

Kickbacks are payments or illegal fees that are paid to a person to gain that person's decision or recommendation. The Real Estate Settlement and Procedure Act prohibit kickbacks to real estate agents from mortgage companies. A sham agreement or sham contract is anything that is false or fake but is presented to a customer as a necessary and legitimate item. Most sham contracts in real estate are for payments that the homeowner will need to make for various services. For example, you may sign a sham contract alleging that you owe $2,000 for a home inspection. If that inspection never even took place, then this is a sham agreement. Signing the papers is unnecessary because you should not need to pay for a service that never existed.

Real estate agents can sometimes prey on a homebuyer's ignorance. Real estate procedures can be long and complicated. Oftentimes homebuyer's hire a real estate agent because they don't want to have to deal with the complicated contracts and negotiations. They assume an agent can take care of the messy work and leave them with a few papers to sign. Homebuyers may not realize that this puts them in an exceedingly vulnerable position. They may not be able to determine when a contract is fraudulent and when it is legitimate. If you have any questions about contracts or believe that you may have been tricked into a sham agreement, then you need to hire a real estate attorney. With the right lawyer on your side, you will be able to look through your documents and determine any scams.

Related News:

When Does a Landlord Need a Lawyer?

A good deal of landlords have no need to keep an attorney on retainer, and many only rent out a few different properties. Yet there are many situations that can crop up when a landlord will need the ...
Read More »

Is 2018 the Time to Buy a Home?

From buyers to sellers, the housing market is looking good right now. Experts are saying that 2018 might be the time to pull the trigger on buying a new home. Right now, this opportune moment to buy ...
Read More »

Five Ways Real Estate Agents End Up in Court

Some real estate agents mean well, but one mistake can result in a court case that can be serious. In fact, one in every five real estate agents will be involved in a lawsuit during their career, ...
Read More »