July 14, 2020
Our state has been hit hard by the COVID-related economic shutdown, which means many Nevadans have suddenly found themselves in precarious housing positions, unable to make mortgage payments or pay rent. There are many organizations out there that have advice and resources to help. Unfortunately, bad times also tend to bring out the worst in people so it’s important to have good information to make good decisions.
Related: Surviving tough economic times with a roof over your head
Jim Berchtold, Esq. heads the Legal Aid Center of Southern Nevada’s (LACSN) consumer rights project, a group of 50 people who fight for low-income Nevada consumers. While his team helps clients with everything from fraudulent car sales, abusive debt collection and predatory payday lending, housing-related issues have dominated most of their time since the shutdown.
Berchtold says there are many people struggling with landlords who are using illegal lockouts and threatening evictions for nonpayment of rent, though that is expressly forbidden in Governor Sisolak’s Emergency housing moratorium. Other landlords are foregoing repairs since many renters are not in a position to withhold rent to force the issue. If you have questions about your rights as a renter, you can reach out to the volunteers at LACSN, Nevada Legal Services and Washoe Legal Services, among others that provide free and low-cost legal services for people throughout the state.
It’s important to remember that many landlords have their own financial issues as it can be difficult to make mortgage payments when they’re seeing reduced (or non-existent) rent payments.
“We need to educate landlords on their rights as well,” Berchtold says. “In many cases, they’re just homeowners renting out a house and they’re entitled to the same resources as anybody else.”
If a landlord is unable to make a mortgage payment because of COVID, they can also seek debt-relief help through the CARES Act. Reducing their financial stress translates to less pressure on tenants.
Berchtold says the key is communication. “There are programs in place to help landlords and renters get through this, but they need to talk to each other,” he says. “This doesn’t have to be adversarial. What is happening now is nobody’s fault, and it has affected a lot of people.”
“Our goal is to make sure landlords keep their properties and that tenants stay in their homes,” Berchtold says. “If we recognize we’re all in this together and everyone shares the pain, we can come out of it as unscathed as possible.”
While the eviction moratorium is being lifted in phases by allowing residential evictions and foreclosures to resume in full on September 1 for non-payment of rents and no cause evictions, the state has put a rental assistance program into place. You can find information on the CARES Housing Assistance Program here.
Berchtold says his team hasn’t seen many foreclosure issues yet, but they’re preparing for that. “We anticipate as this (COVID-19) lingers on, we’ll see an uptick as more and more people are going to be struggling.”
State of Nevada Chief Deputy Attorney General Michael Kovac, Esq. agrees. “The foreclosure moratorium has operated to slow the foreclosures, as well as the scams that go with them,” he says. “Given the economic impact of the current pandemic, it is difficult to envision a scenario in which a large number of individuals do not eventually find themselves at risk of losing their homes in foreclosure.”
While there are many legitimate organizations and resources out there designed to help homeowners keep their homes, there are just as many that aren’t. “Based on what we saw during the recession a decade ago, the fraudsters are likely to prey upon people desperately trying to save their homes,” Kovac says. “And it will take time before the victims realize that they are being victimized and pass that information along to law enforcement.”
Kovac and his team are familiar with many different types of foreclosure scams, and he shares a few examples:
- Fee For Services: “Scammers will likely cold call desperate homeowners and otherwise advertise their purported ability to save homes at risk of foreclosure,” he says. “The scammers will ask for fees for their ‘services’ up front, dissuade victims from contacting their lenders (in order to prevent the victims from learning that the scammers have done no work for them), and give false updates on the progress of their ‘services,’ until they finally cut off contact with the victims altogether.” He adds, “Oftentimes, the scammers will falsely claim an association with a government housing program or some other ‘in’ with the banks/lenders that purportedly gives them some special ability to stop a foreclosure.”
- Phishing: “Scammers pretend to be agents of banks or mortgage companies ostensibly offering homeowners relief, while actually seeking to obtain personal information needed to steal the homeowner’s identity,” Kovac says. The Federal Trade Commission offers this advice for recognizing and avoiding phishing scams, saying phishers may:
- Say they’ve noticed some suspicious activity or log-in attempts
- Claim there’s a problem with your account or your payment information
- Say you must confirm some personal information
- Include a fake invoice
- Want you to click on a link to make a payment
- Say you’re eligible to register for a government refund
- Offer a coupon for free stuff
- Renting out a house they don’t own: “We’ll likely see scammers falsely claiming ownership of a home lost to foreclosure (or soon to be lost to foreclosure) renting out that property to unsuspecting tenants; those tenants will ultimately be forced to move again after the true owner of the home takes possession of it,” Kovac says.
Know the signs
While the scammers are smart, you can be smarter. Kovac says that people and organizations that provide foreclosure rescue services are generally subject to NRS 645F.400, which bars them from these actions, among others:
- Charging homeowners for services that weren’t agreed upon in the contract
- Accepting a power of attorney from a homeowner for any purpose, other than to inspect documents as provided by law
- Making any representation that a homeowner cannot or should not contact or communicate with his or her lender or servicer
“Homeowners should certainly be wary of anyone violating these laws,” Kovac says.
Another scam that Kovac and his team see involves ‘sovereign citizens.’ “The term ‘sovereign citizen’ refers to loosely-associated anti-government extremists,” he explains. “On more than one occasion, we have seen them falsely claim property lost to foreclosure as their own and either move in or rent it out to unsuspecting tenants.”
He identifies some telltale signs that someone subscribes to this sovereign citizen ideology:
- They often use all capital or lowercase letters, as well as punctuation such as brackets, in an odd manner
- They often include a finger- or thumbprint in colored ink with their signature;
- They often cite the Uniform Commercial Code (“UCC”) in documents where it does not apply
- They often have their own official-looking seal on documents
- They often attempt to legitimize the appearance of the paperwork they use to support their nonsensical legal positions with letterhead that appears to be from a legitimate government organization.
“Anyone who comes across individuals or organizations using paperwork with such indicators should be wary of their legitimacy,” he warns.
If you think you’ve been scammed
If you think you’re working with a fraudulent organization, Kovac says to cut your ties as quickly as possible. “If an individual or organization fails to provide you with the relief originally promised in exchange for the sum you originally agreed to pay, you should be highly skeptical if they tell you they need more money from you in order to carry out their promised services,” he says.
The bad news is that you’re going to need to do some due diligence to get your money back and you might not ever see it.
Kovac shares, “It should be noted that there are major differences between criminal prosecutions and civil lawsuits. In criminal prosecutions, our main goal is holding scammers accountable through the criminal justice system, which can result in scammers being imprisoned or placed on probation. While the court may order the scammers to pay restitution to the victim, a victim will only get that money if the scammers are able to pay it (and that is rarely the case). Civil lawsuits, on the other hand, are (generally) primarily aimed at obtaining a money judgment and/or an order prohibiting the scammers from continuing to operate their criminal enterprise. Again, victims often will not be thrilled regardless of whether or not they prevail in a civil case, as they will only be able to collect on the judgment if the scammers have any money to pay it off.
- To have a matter investigated as a criminal case, file here: http://ag.nv.gov/Complaints/File_Complaint/
- The Attorney General’s office also has a Bureau of Consumer Protection, which handles civil cases. You can find out more about them here: http://ag.nv.gov/About/Consumer_Protection/Bureau_of_Consumer_Protection/
Bottom line? “Remember the old adage – if it sounds too good to be true, it probably is,” Kovac says.