Attorney General seeks to suspend licenses of two central Indiana property managers
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Attorney General seeks to suspend licenses of two central Indiana property managers

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Property owners report more than $13,000 in rent payments missing

INDIANAPOLIS, IN – June 2, 2011 – (RealEstateRama) — The real estate licenses of two central Indiana property managers are facing emergency suspension, Indiana Attorney General Greg Zoeller announced today.

The Attorney General filed petitions for summary suspension with the Indiana Real Estate Commission on May 16 seeking to suspend the real estate licenses of Craig Bartels and Derek Crager, principal operators of Crager-Bartels, LLC. The petitions allege Bartels and Crager failed to pay property owners more than $13,000 in rent payments they had collected from tenants. Crager-Bartels, LLC is located in Plainfield, Ind. and entered into contracts with property owners in several states including Indiana, California, Nevada and North Carolina to manage rental properties in central Indiana.

“By seeking an emergency license suspension we hope to prevent these individuals from continuing to operate as we attempt to resolve the issues stemming from the mismanagement of these rental properties,” Zoeller said. “The actions of these two licensed real estate agents harmed both the property owners and the families who are tenants.”

The Indiana Real Estate Commission meets on Wednesday, June 1 and will determine whether to grant the state’s request for an immediate 90-day summary suspension of the two licenses.

The Attorney General’s Homeowner Protection Unit began investigating after receiving several complaints from property owners earlier this year. It determined that rent payments collected by Bartels and Crager during December 2010, January 2011 and February 2011 for six Indiana properties were not paid to the owners. The rental homes are located in Avon, Carmel, Indianapolis and Westfield.

This case involving the real estate agents acting as property managers and not forwarding rent payments to property owners is just one example of a variety of real estate violations that have been on the rise in Indiana in recent years. Since Zoeller took office in January 2009, 4,257 consumer complaints have been investigated by the Homeowner Protection Unit. This represents a 27 percent increase over previous years. More than 500 of those complaints prompted litigation and 1,539 complaints are now being investigated for possible violations of Indiana’s homeowner protection laws.

Also, Zoeller’s office has aggressively pursued actions against so-called foreclosure consultants. These are for-profit businesses that promise to help a homeowner avoid foreclosure by negotiating new mortgage terms. They demand expensive payments up front before performing any services and typically do not achieve any beneficial results and the homes are often foreclosed. This type of business operation is illegal in Indiana and so far more than 60 lawsuits have been filed against foreclosure consultants in the past two years, resulting in dozens of court judgments and settlements. Zoeller cautions Hoosiers to be wary of offers that sound too good to be true.

One recent case of that type involved Foreclosure Assistance USA, Inc, which had contracts with at least 600 consumers across Indiana for foreclosure consulting services. The company required an up-front payment, typically $1,200, without having a required surety bond or following other Indiana statutes pertaining to foreclosure consulting. The Attorney General’s Office reached a settlement with Foreclosure Assistance USA in April which includes $20,000 in consumer restitution.

New laws protecting homeowners from scams and foreclosure have recently been enacted by the Indiana General Assembly.

Homeowners victimized by foreclosure rescue fraud or deceptive credit services often assist the Attorney General’s Office by filing consumer complaints. However, companies committing fraud oftentimes have few or no assets with which to pay restitution or damages to the victims. A bill that Zoeller supported and the Indiana General Assembly passed, House Enrolled Act 1182, creates an Enforcement Assistance Fund. Victims who report wrongdoing to the state can receive up to $3,000 in compensation in certain cases. The assistance is funded through civil penalties recovered from companies sued by the Attorney General for violating certain consumer protection laws.

Also, the Attorney General’s Office is also seeing more cases of Broker Price Opinion (BPO) fraud. The BPO is the preferred method of valuing property for a short sale, due to the relatively high expense of obtaining real estate appraisals. Reports indicate the BPO is fraudulently kept low to deceive the lender concerning the property’s true market value. BPO fraud allows the fraudster to negotiate a low short sale price, thereby creating a larger profit between the short sale price and the price paid by the end buyer.

To help prevent these and other types of scams from impacting Hoosiers, the Attorney General’s Outreach Services team offers consumer education workshops on topics including protection against common scams, mortgage foreclosure prevention, and identity theft prevention. To schedule a workshop or consumer protection training event, complete the short speaker request form available online: http://12.186.81.50/SpeakerRequestForm/
NOTE: The Indiana Real Estate Commission is scheduled to meet at 8:30 a.m. Wednesday June 1 in Indiana Government Center South, Room W064, 402 W. Washington St., Indianapolis. The hearings on the petitions for summary suspension of Derek B. Crager and Craig H. Bartels are scheduled to begin at approximately 9:45 a.m. Link to the meeting agenda here: http://www.in.gov/pla/2785.htm.

Contact:
Molly Butters
Phone: (317) 232-0168
Email: Molly.Butters (at) atg.in (dot) gov

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