Last week I stopped by the Fisherman’s Wharf in the morning to take a walk around. I was amazed at how much worse the disrepair and damage was from the last time I had visited.  These four photos (above) are just a sampling of what I saw.

If I sound a little bitter, it’s because Fisherman’s Wharf has a special place in my heart.  Even before I moved to Oxnard in 1986, I enjoyed Fisherman’s Wharf.  Always a nice place to take a stroll, enjoy the atmosphere and maybe snack on a little fresh seafood.  I’ve taken many a buyer relocating to Oxnard there for lunch.  Every time I bought a new camera (pretty often), I’d visit and and test out my new toy.  I took the photo above Labor Day weekend in 2002.  Restaurants and shops were open and colorful banners adorned the light posts.  Back then it was still a bright and cheerful place and folks were enjoying the last weekend of summer just as they have done for so many summers before.  Little did they know that it would never look this good again nor did they realize that almost a year would pass before the faded remnants of the banners hanging from the light posts, tattered and shredded, would be finally taken down.

It’s clear that Fisherman’s Wharf’s days are numbered.  A developer has acquired the lease from the county (who owns the land) and has big plans for the site as I learned last week at presentation on the future of the wharf.  (I will discuss that in an upcoming article.)  It’s obvious that there is so much damage to the buildings that restoring it would require rebuilding major portions of it and is not economically feasible even if there was the will to do so.    

In honor of the 30th anniversary of the Fisherman’s Wharf that will be  celebrated nowhere except right here, (at least in this universe) please enjoy a few of my favorite photographs of a place that holds many fond memories for me—and perhaps you too. 

I was at the auction, held by the Real Estate Disposition Corporation, because a client of mine was interested in four of the homes located in Thousand Oaks that were to be auctioned off that night.  I’d previewed them for him two weeks beforehand, and while he’d decided against participating I went anyway to see what kinds of bargains were to be had.  The auction started with a brief explanation of the rules. 

• You must be registered and have a cashier’s check for $5,000 made out to yourself.
• You must be able to write a check for 5% of your winning bid. (The difference between the $5,000 cashier’s check and the 5% deposit.)
• There is a 5% buyer’s premium added to all winning bids.  (If your winning bid is $300,000, then add $15,000 for a total purchase price of $315,000.)
• The successful bidder will be ushered to a bullpen to be qualified and have his bid confirmed.  Once that’s done that home’s number turns green on the screen listing each auction number.  Otherwise, it goes back for a second time (or a third, as happened twice that night.)

So were there any good deals to be had that night?  Absolutely.  Some homes sold for maybe 15-20% off current market value once the 5% “Buyer’s Premium” was added to the price.  Most of the homes sold for less than a 10% discount.  A few homes sold for market price.  I was fascinated to note how many bidders didn’t have their bid confirmed and the homes were auctioned off a second or third time.  In many cases, the original bidders who came for just that home had already gone home causing the final price to drop $5,000-$20,000 from the first time around.

This type of auction is not for everyone.  There is no safety net.  No inspection period. No disclosures of condition. No termite work. You have to do all of your homework in advance and there is no cooling off period.  Is it worth the risk for a 15-20% discount?  That depends on your tolerance for the risk you’re taking on in exchange for the discount.  If you decide to bid at one of these auctions, make a friend of a contractor so you can have him visit the homes you’re interested in with you beforehand.  Do research on what similar homes are selling for in the neighborhood.  Use your favorite Realtor to help since many auctions will pay a Realtor’s commission at no cost to you.  Most importantly, decide on what your maximum bid will be before you get in the car to go to the auction.  The auctioneer is counting on the fact that you will lose your good judgement in the heat of the moment.  Remember, there is always another house!

If you understand the real estate laws that apply to homeowners in default it becomes a lot easier to sort out the genuine offers of help from those who seek to take advantage of you.  Stella Ling, with the California Association of REALTORS, (C.A.R.) went over the Foreclosure Consultant Law.  This law is designed to offer protection to owners of properties (1 to 4 units) that are in default from people or companies providing foreclosure related services for compensation.  Licensed real estate agents are generally exempt from this law but there are there are some guidelines.  If a real estate agents is doing something outside of what they usually do in the course of a real estate transaction the law may apply.

• A real estate agent cannot acquire an interest in the property.
• If the agent makes a direct loan to stop the foreclosure, the law applies.
• If an agent charges an in advance for services, they must get the contract preapproved by the California Department of Real Estate.  (Stella says noone, to her knowledge, has this type contract approved, so if an agent asks you for an advance fee, chances are almost 100% that they are breaking the law.)

For foreclosure consultants that are not real estate licensees, some of the requirements are:

• Written contract with a 3 day right to rescind.
• Consultant cannot acquire interest in property.
• No money can be paid until services are fully performed.

To be safe, don’t sign anything without getting a second opinion from an appropriate and qualified professional.  Ask for proof of results and references.  And most importantly, always remember that if it sounds too good to be true it probably is.

We were told about an excellent video on Real Estate Scams published by FreddieMac on YouTube to help educate the public.  You can view it here.

Miles Weiss, Senior Deputy District Attorney in charge of the Real Estate Fraud Unit here in Ventura County told the audience about some of the scams that are happening in the county.  Scammers are promising loan modifications and charging upfront fees without any results.  Miles says there is about 0% change of them being able to deliver results.  Another scam involves deeding a 1/8 interest to a shell company that will file for bankruptcy to forestall the foreclosure.  The county recorder is sending his unit any such suspicious documents for investigation.  He encouraged the audience to report any suspicious activity to his office by visiting the Ventura County District Attorney website and filling out a real estate fraud complaint form. 

Miles acknowledged that the problem is huge and he and his staff have limited resources.  As such, they go after the most serious cases first.  It is still important to report all suspected real estate fraud even if the DA is aware of it since you may be the one to supply the missing piece of information that solidifies the case.

To wrap things up, Miles talked about another class of victims; renters.  Real estate scammers often rent out homes that are in the tail end of foreclosure.  They collect deposits and rent without disclosing that information.  Then the bank forecloses and the renters are out on the street having lost all the money they paid to the scammers.  These types of scams are proliferating on sites like Craigslist, so be careful and do your home homework.  

This article is intended to give you a general overview of the problem but cannot address everything that might apply to an individual situation.  Always consult an appropriate professional.  If you have any specific questions, call or email me.

Scam artists do not look or act dastardly.

I attended along with many other concerned Ventura County real estate professionals who are worried about real estate fraud that seems to be epidemic.  Everyone was hoping to learn more on how to identify and combat the problem.  Ling went on to tell us that any homeowner in foreclosure is under tremendous stress. The weak, elderly, and people with language barriers make prime targets for scammers.  People in default usually have fewer resources to fight back.  The first step in the foreclosure process is the Notice of Default (NOD) and in her opinion, this is like a big billboard saying, “Come and get me scammers.”  Actually, that was in the old days.  Now it’s an instant email blast to the defrauders.  To illustrate the point she told us the story of Martha Rodriguez who located victim homeowners through computerized databases that list homes going into foreclosure.  She would promise homeowners to refinance their homes with a co-signer who had good credit to stop foreclosure and save the home.  Instead of refinancing, Rodriguez and the others submitted loan applications in the names of straw buyers.  These loan applications (which contained false information) let them get loans from lenders that otherwise would never have been obtainable.  The loan proceeds were used to pay off the loan in default and the remaining proceeds were skimmed off by Rodriguez and her cohorts.  Even though the homeowners were promised that they would keep their homes, they lost title.  The straw buyers didn’t make payments on the new loans and they went into default.

Other common scams Ling shared with us were offers to stop foreclosure for an upfront fee of $1,000 (or much more).  These schemes often included placing a lien on property or transferring title to facilitate a refinance from a borrower with a better credit score and a promise to sell the house back to them.  Anne Lanphar, with First American Title, shared what title companies look for in trying to combat fraud.  She identified the following red flags that are common elements of problem transactions:

• Escrow has no contact with seller.
• Someone signing for the seller using a Power or Attorney.
• Buyer is buying home subject to existing loan.
• Seller to remain in property.
• Repurchase options for seller.
• Usually high level of fees.
• Someone assisting borrower.
• Large payments to 3rd parties.
• Same notary on buyers loan documents and seller’s grant deed.
• Seller transferring property into a trust (other than a family trust.)
• Purchase price way below market value. 

It is in the best interest of Title and Escrow companies to be vigilant. Anne gave us an example of a person who recently tried to open an escrow with First America Title where the seller didn’t speak English and was selling his home for the $200,000 loan amount (it was in default.) The property was worth $450,000.  They refused the escrow and turned in a complaint the Ventura County District Attorney.  The goal is to stop these kinds of scams before they get started. 

 (To be continued in Part II)