Legislators try to prevent homebuyers finance woes

SHAWNEE — There are crooks who prey on unsophisticated homebuyers, but mostly there are homebuyers who simply don’t do their homework, according to Rep. John Siptroth. Siptroth, whose district includes the southerly, fast-growing townships in Pike has sponsored legislation to expand licensing requirements and stiffen penalties for fraud for those involved in the finance side of homebuying. It’s one of six pending bills before the legislature. The state House Commerce Committee last Friday held hearings in Monroe County, where scores of lawsuits and hundreds of fraud complaints have arisen. Scam artists, usually with no connection to legitimate trade, prey on the naive buyer, bilking hundreds of people annually, according to Monroe County District Attorney’s office investigator Eric Kerchner. Most don’t even know they have been cheated until foreclosure proceedings begin. Fraud can also arise when builders or mortgage brokers manipulate payroll and bank records of a potential buyer to enhance the buyer’s chance of qualifying for a larger mortgage. Some appraisers are being charged with providing incorrect values to meet the seller’s requirements. For their part, Siptroth said homebuyers often don’t consider all the issues: the time and cost of commuting and the additional costs of furnishing new homes. What happens if couples divorce? Kerchner said 95 in every 100 people he interviews with complaints admit they did not read contracts before signing them. The state does not require an attorney’s involvement in these transactions and many forego legal assistance to cut costs. With roughly one-third of Monroe’s population, Pike County has thus far seen little of abuses that Monroe has. But “as growth continues, it will be in Pike, too, “ said Siptroth. Pike County First Assistant District Attorney Ray Tonkin said property owner/victim crimes in Pike now include instances of lots being sold more than once, or a contractor overcharging for materials. However, he confirmed, foreclosures are on the increase in the county. Tonkin says there is no sure-fire way to avoid fraud. “It sounds self-serving, but having an attorney up front can save you down the road,” he said. Tonkin advised getting builder’s references and checking with the local builders’ association. They check on prospective members and police them. For more information about local builders visit pikecountybuilders.com . The state’s home financing agency provides free counseling services, for those considering a purchase and those with finance problems. For details visit phfa.org/applications/counseling_agencies.aspx.