A California real estate agent pled guilty to conspiracy to commit real estate fraud after collecting short sale fees he was not entitled to, the ""California Department of Real Estate"":http://www.dre.ca.gov/ (DRE) announced in a statement Monday.[IMAGE]
In October 2010, the DRE filed an action against Matthew Wayne Stewart and alleged that he received illegal profits in two short sale transactions in Placer and Nevada counties. Stewart was accused of requiring buyers in the two transactions to pay additional short sale negation fees that were hidden and not disclosed to the lenders or sellers. The allowable compensation to be paid to agents can't exceed 7 percent of the sales price, but Stewart exceeded this by having the buyers pay an additional 3 percent.
The case was referred to the state's Mortgage Fraud Strike Force. On December 28 2011, the ""Office of the California Attorney General"":http://oag.ca.gov/ filed felony charges against Stewart for defrauding buyers and sellers in short sale transactions.
On April 18, 2012, Stewart pled guilty and as part of the plea, he had to surrender his real estate license, serve 90 days in jail, pay restitution of approximately $25,000, and be on formal probation for three years.
""This case should be a warning to all licensees involved in short sale fraud"", stated Bill Moran, DRE's enforcement chief. ""Such fraud by real estate licensees will not be tolerated and the DRE will continue to work with its law enforcement partners to ensure unscrupulous operators are punished to the full extent of the law.""
The California DRE warned that due to market conditions and the large number of financially distressed homeowners, the potential for short sale fraud is significant.