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Realtors' culture not tough on fraud

By Dan Dewitt, Times Staff Writer
Published February 17, 2008

Read the next few paragraphs. Decide who you think should pay for their actions - and then guess who did.

Records show that Lance Sutter and Ruth Hersh, agents with Exit-Success Realty, both drastically changed list prices of houses shortly before the houses were sold multiple times, a recognized indication of mortgage fraud.

Two of the properties Sutter listed quickly slid into foreclosure. Hersh, working on the sale of Barbara Joy's house in Hernando Beach, asked Joy to sign a contract showing that a sale price was $225,000 higher than it really was - a practice so fishy that Joy's lawyer told her to stay "far, far away" from the deal, Joy said.

Another Exit-Success Realtor, Michelle Paedae, on the other hand, told the St. Petersburg Times two weeks ago that she didn't believe Sutter's and Hersh's claims of innocence.

By now, you're probably expecting to hear about a case of upside-down justice, and you are right. At least I think so.

Exit-Success owner Pat Richard has fired Paedae. Meanwhile, Sutter and Hersh remain agents in good standing.

This is all in keeping with the way the crisis of apparent mortgage fraud has unfolded in Hernando Beach: Other than unconfirmed reports of an FBI investigation, the agencies with power to take action have barely lifted a finger.

And if you think "crisis" is too strong a word, ask Realtors who have been trying to sell houses there. They say fraud helped cripple the market in Hernando Beach, where only 27 houses changed hands last year.

County Property Appraiser Alvin Mazourek said he suspected fraud in some of the 11 sales in Hernando Beach he eliminated from tax calculations the past two years. He shared none of this with the Sheriff's Office.

That agency, meanwhile, says it hasn't investigated because it hasn't received complaints from victims. (Except, Joy said, she offered to share documents and even to set up a sting at her closing, and couldn't even get through to a detective.)

The Hernando County Association of Realtors has the power to strip membership rights. But executive director Ed Carr says the organization's job is not to prosecute members but to educate them - which it has done.

That may be true, and I imagine Carr wouldn't last long if he started taking on Realtors. That's because of the social connections that tend to insulate professionals such as Realtors, with one prime example being the double role of the association's attorney, David Carter.

He's the main legal adviser to the association - which some say should be weeding out suspect members - and to Richard's agency, which apparently wants to protect them.

(Richard said on Friday she hasn't seen evidence of wrongdoing and that Paedae left partly because she wanted to.)

The problem with all this is that the actions of a few Realtors have tainted the reputation of the honest majority.

Paedae, who quickly found work with another agency, made that point when she talked to the newspaper. She also said something needs to be done about Hersh and Sutter - said it so well that her words deserve repeating:

"If they knew what they were doing, they need to be held accountable. If they didn't know, they are so ignorant they don't deserve to have a license."

[Last modified February 16, 2008, 20:29:59]