Today I am still perplexed at how easily real estate flippers got away with false appraisals on overvalued land.

Step1
The banks loaned too much based on the true value of the underlying collateral and the seller’s walked with the excess cash (often repeating the process as buyer then seller in the next cycle).

Step2
In the simple case the lending bank has a strong interest in checking the accuracy of the appraisal (or hiring its own reliable appraiser) before loaning money on a land purchase and taking back a mortgage. Some argue that structured finance dilutes everyone’s incentive to check for fraud. The argument notes that the bank sells the paper to a special purpose vehicle (SPV) and the SPV sell securities to investors.

Step3
The risk of fraud is borne by the investors who do not or cannot check on the validity of any appraisals. The investors rely on rating agencies to rate the default risk and the rating agencies are operating under conflicts because they are paid by the SPV and get consulting fees from the SPV. The bank (and the originating broker) and the SPV no longer care because they take fees and pass on the risk.

Step4
The investors end up holding the bag. The argument seems overly simplistic. Most SPVs sell tranches and the lowest tranche, the so-called equity tranche, is not rated and very risky. Those who buy the equity, usually hedge funds, have an increased risk of loan defaults and should therefore have an increased incentive to monitor the quality of the loans.

Indeed, one could argue that the equity buyers and a stronger incentive than a bank that does not sell the paper to check on the default risk in the loans because the hedge funds took more risk with each default. There were long time rumors in the market of real estate flipping. Why did the hedge funds not check out the rumors, or at least price the equity to account for the rumors? Moreover, many of the same banks that passed on the risk to the SPV then bought SPV securities in their own hedge funds (and those funds are now in distress). Why did the banks not have the proper incentive, when purchasing back the paper, to make sure the paper that went to the SPVs they invested in was sound? In short, I continue to be baffled by stories of easy money (made even by gangs of thugs) on real estate flipping that overvalued land in the appraisals.

Foreclosure schemes. These are particularly evil because they prey on people with big enough financial problems that they’re in danger of losing their home. A homeowner in the early stages of foreclosure may be contacted by a fraudster who says he can help the homeowner get rid of his debt and save his house for an upfront fee, which the fraudster takes and then disappears. In another scheme, a homeowner is approached by a con artist who offers to help them refinance the loan. “They sign all these documents and find out later that they actually sold the house — to the fraudster. Then they face eviction.

Source

As the world becomes increasingly more crowded and the cost of living rises, the idea a relaxing retirement may seem more like a dream than a realistic goal. However, there are still pockets of beachfront property available in Mexico’s Costa Maya region at a fraction of the cost of property in the US. Today, many retirees and self employed individuals have decided to stretch their dollar in this Caribbean paradise while also making a smart and profitable real estate investment. Here you’ll find a guide for foreign real estate investing in the Costa Maya region of Mexico.

Look for Recently Revitalized Areas

The best real estate deals are often those in places of natural beauty that have recently undergone a massive revitalization or beautification project. There so many areas of pristine coastline around the world often overlooked because they haven’t yet been rejuvenated to meet the tastes of those wishing to retire in tropical luxury.

Areas that have recently undergone government funded revitalization projects often remain off the radar of the real estate investment masses, and are great places to look for serious investment deals.

The Costa Maya project is the newest in a series of revitalization projects initiated by the Mexican government to increase the value of Costa Maya real estate. Previous projects included the rejuvenation of Acapulco and Cancun, both of which have proven extremely profitable in terms of real estate investment.

Seek out Areas with Emotional Appeal

Foreign real estate investments are usually most profitable in areas rich with emotional appeal and natural beauty. As the world becomes a more crowded place, areas of natural beauty that ignite a sense of freedom and peacefulness will continue to diminish.

As cities grow and sprawl, the remaining natural havens continue to increase in value. Costa Maya, a 57 mile strip along the Caribbean Sea, is rich with picturesque tropical natural beauty. Its deep blue skies, crystal clear oceans, and white sandy beaches remain raw and natural sanctuary just south of the tourist driven area of Cancun.

Much of the tropical real estate for sale in the Costa Maya region is just now available for development. New property owners are free to develop homes that compliment the laid back, tranquil, Caribbean lifestyle to further increase the land’s property value. A villa style home, just feet from the gently lapping Caribbean Sea will continue to increase in value as the rest of the world becomes increasingly more stressful and overpopulated.

Government Friendly Property Ownership Laws

Buying property in any foreign country requires a great deal of research and the assistance of an estate agent or local attorney. The laws of some countries are safer and friendlier to foreign buyers than others, and each has its own set of requirements for ownership.

The Mexican government offers property ownership opportunities that are friendly for foreign investors. As an adaptation to a historic law written to prevent Mexico from foreign invasion, investors are required to set up their own Mexican corporation. The property owner’s corporation technically owns the title to the land, protecting it within the laws of the country. Some property agencies have used this law as a lucrative source of revenue, charging buyers additional fees to set up corporations. To avoid this, look for property agents who offer help setting up corporations, trusts, and other legalities at no additional cost.

Governments set their own property use standards such soil regulations, zoning laws, etc. It’s important to look for a reputable property agent that guarantees the property is buildable according to the local and federal government regulations. You should be entitled to either a full refund to have the property brought up to compliance by the agent should your property be deemed not suitable according to government regulations.

Buying a tropical home in a foreign country is a very real opportunity. Those with a sense of adventure and the desire to live out their dreams can easily purchase their dream home in the setting they desire most while making a lucrative investment in their and their families future.

Real estate investments are remarkably fulfilling ventures especially in the midst of a recovering and down economic and financial sector. There are many ways of ensuring the profitability and productiveness of your venture however there are also deteriorating instances such as real estate frauds that jeopardize the fruits of your investment. It is therefore of utmost importance to gather all salient and necessary information that will help you know and understand the consequences of any illegal real estate activities.

Take note that real property related frauds are also known as mortgage fraud and not necessarily predatory mortgage lending. These two are separate entities with different essences and meanings. The illegal activity often starts during the mortgage loan application particularly when the home buyer or loan applicant resorts into provision of falsified and inaccurate information regarding their required documents and proofs of eligibility.

One thing that often happens and resorts into fraudulent activities is when home buyers fabricate their employment history to qualify for the approval of a home equity loan. It is common knowledge that mortgage lenders have fundamental basis and criteria to determine if you are eligible. Steady income through job salary wage is vital and is primary basis that makes you a qualified borrower. Hence, in order to secure the needed financial assistance, most home buyers opted to put inaccurate details regarding their work stability and the salary they receive in a monthly basis and the like.

Another false documentation that is often included in real estate or mortgage fraud is fabrication of their credit report. It is not a surprise if most home buyers have tainted records in their credit standing because of the prevalence and impact of the contemporary economic downturn. Having a bad credit score is a downfall for most borrowers that oftentimes results to their disqualification for a home equity loan or getting a lesser mortgage rate than what they want to have. Hence, to remedy this dilemma, they are often lured into making illegal solutions to their problem and thus falsify their credit report. These are very offensive activities which results to imprisonment and fines hence, if you want to make it big in the industry, do something that is not deviating from the law.

Most real estate scams are also done through deceiving mortgage providers into giving extra money or larger amounts rather than the asking price of the home seller. For instance, home buyers give a different settlement statement to the home seller and the mortgage lender respectively. He gives a correct statement to the home seller which reflects the accurate price rate of the prospective property. However, the buyer intentionally provides an erroneous statement to the lender in order to secure a larger loan amount. The excess money incurred through this illegal transaction or activity is then distributed among those involved in this scamming venture.

Home loan and real estate frauds are truly blatant and malicious activities that bring you more harm than good. Start your real property ventures right to secure a very reliable and productive investment in this vast and rewarding market.

From the years 2002 to 2005, Georgia has been consistent on the top among mortgage and real estate fraud cases in the United States documented by The Prieston Group. The Prieston Group is a fraud protection and prevention group. The types of fraud operations preying on Georgia real estate investors include false rent verifications, occupancy fraud,appraisal fraud,investment schemes, broker fraud, and identity theft. Because of this, the state now upholds the Georgia Residential Mortgage Fraud Act which names misstating, omitting, and misrepresenting facts and intentions in real estate deals as criminal acts. The Georgia Residential Mortgage Fraud Act continues to boom the real estate industry of state.

Source: http://www.buzzle.com/editorials/6-19-2006-99686.asp
Image source: www.filebuzz.com

COMMON REAL PROPERTY FRAUDS:

Home Equity/Identity Fraud – A forged deed is recorded to give the appearance that the perpetrator has
acquired ownership of a property. The perpetrator uses the equity in the property as collateral to borrow
money. No payments are made on the new loan(s), and the true owner could face foreclosure.

Home Renovation/Mortgage Fraud – Contractors offer to do home improvement work or lenders offer
special “low-interest” financing, but do not deliver what was promised. Homeowners are left with partially
complete or substandard construction, or a mortgage payment that is higher than expected.

Real Estate Investment/Foreclosure Fraud – Investors are lured into buying property that is supposedly
facing foreclosure for pennies on the dollar. Quitclaim deeds and other documents are forged to give the
appearance that a property is being sold to avoid foreclosure.

Source

Panama Growth

The International Monetary Fund (IMF) just released its forecast for economic growth in Central America. The collective economies from Guatemala to Panama will grow by an average of 2.7 percent next year according the IMF. Panama will lead the pack at 5 percent. The IMF predicts a growth rate of Panama’s economy of 6.3 percent in 2011.

The IMF states that Panama’s growth rate dipped to 3.3 percent in 2009 meaning that Panama never had a recession while virtually all of the rest of economies in the world experienced substantial contraction.

Panama Trade

Although the signed free trade agreement with the United States is still awaiting approval by the US senate a free trade agreement with Canada is progressing and Panama’s free trade agreements with Costa Rica and Singapore have helped reduce prices and promote trade for several years. Panama is current part of a delegation in Brussels negotiating a number of issues, including a trade agreement giving better access of agricultural products to the Common Market.

Whether trade stops in Panama or not at least 5 percent of sea trade in the world passes through the Panama Canal. That number may well double with the completion of the much larger set of locks in 2014 when the Panama Canal Expansion is completed. A key factor for Panama is the expansion of facilities along the old Panama Canal Zone. When the USA ran the canal it kept the area for five miles on either side as a military reserve. With the exit of the USA Panama is developing port facilities, logistics sites, and even assembly operations for export.

The increase in trade is expected to boost Panama’s economy even further as the recession lifts elsewhere and global trade picks up again.

Panama Business

For much of Panama’s existence a common source of development capital for the small business person was the pawn shop! Credit checks were difficult if not impossible and much property was not titled so that banks would not issue credit based on land and buildings a collateral.

Two things have happened over the years. The landmark work of economist Hernando De Soto showed that by titling property throughout the third world capital could be unleashed for growth and prosperity. Panama has aggressively pursued titling of property of many years with excellent results and the flourishing small business activity in Panama demonstrates.

The second factor has been a recent change in the credit law allowing more comprehensive and accurate credit checks. With the ability to demonstrate credit worthiness, and perhaps having property for collateral, small business owners are not cuing up at the pawn shop for the cash to launch a new business initiative.

More so than the Canal Expansion and growth in foreign trade the change in Panama’s credit laws has lead to greater prosperity of Panama’s middle class. This, in turn, has lead to higher car sales and the purchase of more expensive homes and apartments. This aspect of Panama’s prosperity has been as much a driver of real estate prices as the North Americans and Europeans purchasing high end property on the Bay of Panama.

Panama Real Estate Recovery, Growth, and Investment Opportunity

Although the middle and low ends of the Panama real estate market did not blink during the recent economic slowdown the high end experienced a substantial correction. Prices dropped along Avenida Balboa and in expat retirements havens from Cero Azul to Boquete. Banks repossessed properties and other are still available for a fraction of their previous prices.

What is happening as Panama’s economy mends itself and foreigners get their finances and credit in order again? The price of high end real estate in Panama is heading back up, as much as 35% in the last year. The high end of the market has a ways to go and local real estate experts are expecting another three to five years before prices reach a stable level. In the meantime add underpriced real estate to your list of Panama business opportunities.

Since the real estate market crash, fraud is at an all time high. The only way to protect yourself is to learn the signs of a scam and the recent laws and programs put into place to help victims. There have been 398,604 tenants evicted from homes already this year due to landlords in foreclosure and that number is growing daily. Most of the time when this happens, the tenant is completely unaware that their home is in jeopardy. This is called rent/equity skimming. It is a felony in most states and can be prosecuted.

Now to back up a little let me explain how and why this is happening. The first and most wide-spread reason is simply that these property owners are victims of bad loans. Their mortgage arms come due and without being able to refinance they are faced with foreclosure. At first they may try a loan modification, if they use one of these ‘companies’ many times they don’t work and they end up losing up to $2000, just to let the someone else call their bank for them. Even if the property owner is smart enough to go to the bank themselves the statistics on these are so poor that it only helps 6% of all property owners in the United States. After a modification fails, they try to sell, however, in most of these cases, the property is worth less than they owe and with the tightened lending markets, there are even less buyers which make their chances of selling even slimmer. Eventually the property owner gives up and moves’ knowing their ill fate is Foreclosure then Bankruptcy. However, since foreclosure takes several months, some property owners decide to rent the property out until the bank takes it back. The renter moves in and pays rent each month until they get the foreclosure letter from the bank saying that the owner has not being paying on their loan. The tenants in complete shock are quickly evicted by the bank. Even worse, some property owners offered a rent to own/lease option with the tenant and collected between $3000-$10,000 dollars up front. Since the property owner will be forced to file bankruptcy with the foreclosure, the tenant will never be able to get their ‘option money’ back. The owner of the property is simply angry and is trying to get some money back on their investment they will lose.

If you think that’s bad, just keep reading it gets worse. The next Real Estate scam is called a ‘Renter Shark”, this person, drives through a neighborhood, finds a vacant property. Breaks in and changes the locks, sticks a ‘for rent’ sign in the yard and then rents the property out. The tenants rent/lease option a home from a criminal, and then one day, someone stops by for the bank and finds people living in the home and evicts them. Again complete shock to the poor family/persons living in the home that will now be displaces and probably financially strained.

The good news is that there have been new laws put into place to help protect renters. There are other scams but, these are the most common right now. They are felonies in either case and will be prosecuted.

To learn more about these scams and how to protect yourself go to: Protect Yourself From Real Estate Fraud.Com

Mortgage fraud is on the rise today in the housing market, significantly so since 2001. In a real estate market where mortgage fraud was few and far between it has grown to high levels for both buyers and sellers and has created havoc and financial damage in the lives of many homeowners and home buyers. First-time home buyers and seniors are two of the highly targeted markets for home mortgage scams.

Mortgage fraud actually refers to a variety of scams. Most of these scams involve inflating the value of a house or other real property for more than its value and the scammer pockets the difference. It significantly affects your home buying, home-selling and home equity. It can raise its ugly head for subprime loans, foreclosures and reverse mortgages. It also can affect insider trading as it relates to mortgage securities.

The following tips will show you how you can avoid these scams and stop or spot mortgage fraud. It’ll help you become informed and prepared if you’re a homeowner looking to refinance or sell your home or if you’re a home buyer.

Be wary of any investment opportunities that offer “no money down” or “cash back at closing.” Be wary of adjustable mortgage interest rates and thoroughly understand what this means before you go this route.

Adjustable interest rates have created many home bad credit problems. Many home buyers just did not understand or were not fully informed about the future jump in interest rates and what that would mean. Many home buyers were not prepared for these high interest rates.

Make sure to check the history of the sales on the property. How many previous owners were there for the property? If there have been several sales within a short time it indicates the values are inflated.

Make sure to have your own real estate agent, real estate professional or real estate appraiser establish the value. Your best bet is to hire you own appraiser or a bank official who can validate the property price in case it’s inflated. This can be hard to tell in rapidly rising or falling markets. Scammers who are intent on fraud will pay an appraiser for the appraisal and report they want.

Make sure they are using comparables – that is getting the prices on similar properties that have sold in your area – not the prices on listed homes that haven’t sold. Check with your local tax assessor or whoever records the deeds to the property to make sure that the seller really does have title or own the property.

Common sense would tell you never to let anyone else use your name or Social Security number to buy a home or other property, even if they offer to pay you. But believe it or not this does happen.

Make sure to read and understand everything on your contract and other documents that you’re asked to sign. Talk to your real estate agent if you have one or a real estate attorney if you need anything explained.

If any of the documents have any blank areas or have any information that is not accurate, don’t sign. Check to make sure that your income is not overstated, the, source of your down payment is correct, the sales price is right, the type and length of your employment and states your intention to live in or on the property as your primary residence not use it for a rental if that’s the agreement.

Make sure to deal directly with the mortgage broker you’ve been working with or directly with the lender. Don’t let anyone lese handle or arrange your loan for you. Make sure you get a copy of all the signed closing documents.

Make sure to watch out for any of the older folks or first-time home buyers you know who may be unfamiliar with real estate transactions and real estate financing.

Mortgage fraud is most rampant in Nevada, California, Florida, Arizona and Illinois so if you live in these states watch out.

Much of the real estate fraud or mortgage fraud or scams are due to real estate insiders – mortgage brokers, lenders, loan officials and real estate brokers.

For example: your real estate broker insists that you use a certain lender or they have a mortgage company on site or in the same complex. Sure, many can be on the up and up but some are not. Your real estate broker should help you find the best and not steer you to one that he is in cahoots with. You have the final say.

Don’t let any lender try to talk you into borrowing more money than you need or can afford. Make sure to take your time and don’t feel pressured or rushed. Beware of any nothing-down loans and altered information to qualify you for a home loan. Don’t borrow any money that you can’t afford to pay back.

Ask your family, friends, co-workers and associates, who you trust who have recently completed a home mortgage, for referrals to mortgage brokers, lenders or other real estate professionals. This would be true also for loan modifications and “restructuring” loans.

Lastly make sure you get the best credit and financial counseling, go to home buying classes, real estate financing seminars or workshops and brush up on your mortgage and home buying education before taking the plunge. Avoid mortgage fraud by knowing the pitfalls and proceed slowly and cautiously and get an honest real estate broker or professional for the best home mortgage experience.

Today, we will say something in this articles that can make a big difference in your business.
However, you might have used it so many times in your daily life.
We are talking about ads, campaign, direct mail etc.

We suggest you an exercise first.

Pick up the newspaper and have a look at the section where your and other’s classified ads are put.

If your ads have a similarity with other’s, that means you are going to create huge opportunities.

Now it’s time to make a difference. If there are no or less testimonials, you must get an ad published with a testimonial.

Testimonials are powerful thing. They leave a very good impression on everyone.

You can incorporate this strategy in direct mail and other things.

A good testimonial will say these things.

“john helped us so much in avoiding foreclosure and we saved our credit that allowed us to move on our lives. Besides a professional help, he gave us comfort and peace of mind, care. I feel overwhelmed when I talk about his company.”

It is very important that your testimonial conveys right things that is trust, results and genuineness. Business is all about trust.
If you keep these points in mind, your ad is surely going to dominate the ad space.

It is to be noted that we can apply the power of testimonials to other things also.
Letters, direct mails and flyers can be made more catchy and impressive when we write testimonials in that.