All About Real Estate Fraud

Mortgage Fraud

Patrick — Wed, 10 Feb 2010 10:00:28 +0000

There are 2 type of mortgage fraud.

Fraud to get a property
Fraud to make a profit

The first is were someone lies about facts to get a loan to buy a property.
The second is where someone lies about facts to make a profit.

Fraud is committed by falsifications in the following ways:

1. Loan application fraud. Where an applicant lies about their income or their job. Perhaps the down payment they are making was given to them by the person selling them the home and the value of the home inflated to cover it.

2. Exaggerated appraisals. Appraisal is an art, not a science. Who can really be sure just how much a better view, or a swimming pool (for example) adds to the value of the property? The buyer wants the house, the seller wants to sell the house, the real estate broker wants to make the commission, the mortgage broker wants to make a commission. There is a lot of pressure on that appraiser to massage the figures a little to create a value that makes all these people happy.

Not to mention the possibility that a crooked appraiser could be in league with a crooked seller or borrower to give appraisals that are grossly exaggerated.

3. Falsified or fake credit reports. It’s really not that hard to use modern technology to “clean up” a credit report by copying it and “losing” some bad stuff.

4. False income. Applications can give the phone number, not of the company where the person supposedly works, but of a friend. The answer, look up the phone number of the employer in the white pages. Listen out for tell tale sounds, like children in the background in a supposed office setting.

5. Forged tax returns. Easy enough to fake using products like TurboTax ® etc. The answer, ask the borrower to sign Form 4506 and get a copy direct from the IRS. Click here for a copy for form 4506.

6. Fake title insurance.

Source
Image Source :cbc.ca

Things to do To Stop Real Estate Fraud

Patrick — Thu, 14 Jan 2010 10:00:28 +0000

Real Estate Fraud is occurring much more frequently now than ever before. It is very important as real estate professionals that do business the ethical way that this stops. Below are a few tips to protect yourself if you feel uncomfortable in a transaction.

Document the Situation: Prepare an Amendment to Contract to be signed by all parties.

Disclose Information: Disclose all changes to the funding lender and obtain their written approval.

Verify the HUD-1: Verify that the HUD-1 Settlement Statement accurately reflects the transaction and any rebates, allowances, discounts, etc.

Report: If you suspect fraud report it!

Withdraw: Before you become involved in illegal activity you can withdraw from representation.

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Mortgage Fraud And Identity Theft Bills Continue to Progress

Patrick — Thu, 17 Dec 2009 18:36:59 +0000

Washington Attorney General Rob McKenna announced that much of his 2008 legislative agenda has survived the 2008 Legislative session.

Mortgage foreclosure fraud:

House Bill 2791, sponsored by Sen. Pat Lantz, D-Gig Harbor, helps reduce foreclosure rescue schemes, including those with an option to allow the original homeowner to buy or lease back the property. The bill has passed the Senate, 39-6.

Identity theft:

Bills giving ID theft victims more tools in the fight to clear their names are now one step closer to the Governor’s signature.

House Bill 2637, which allows records provided by out-of-state businesses to be authenticated by affidavit rather than in person in criminal cases, has passed both houses and now heads to the Governor’s desk.

HB 2637, sponsored by Rep. Kirk Pearson, R-Monroe, was recommended by the Law Enforcement Group against Identity Theft (LEGIT). LEGIT was a workgroup convened after McKenna’s 2005 ID Theft Summit formed to identify ways to better ensure successful identity theft prosecutions and reduce the number of crimes that occur in Washington.

Senate Bill 5878 incorporated two proposals requested by the Attorney General’s Office, one requiring police reports for victims of identity theft and the other clarifying that each act prohibited by the identity theft statute is a separate unit of prosecution. The bill, prime-sponsored by Sen. Jim Hargrove, D-Hoquiam, passed the House of Representatives 95-0 on Tuesday.

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What to do if you’re a Real Estate Fraud Victim?

editor — Mon, 23 Nov 2009 11:07:05 +0000

If it came across your mind that you could be a victim of a real estate fraud or scam, then it is very much important for you to move and act quickly. Here are some steps you can follow to get help that you need when this happens to you.

First, report what had transpired and everything that happened to your local police department. Second, tell your lawyer and adviser about what happened and scrutinize them by asking what steps you should make and inquire on what concerns you.

Lastly, contact your Local land registry officer as soon as possible as to prevent further harm.
You can also consult with someone at your bank, if you want.

Image Source : scamhunters.blogspot.com

Identity Theft in Real Estate

editor — Mon, 26 Oct 2009 11:16:30 +0000

One of the common modus in real estate scams is identity theft. Identity theft refers to involvement of stealing money or obtaining other benefits such as properties and land pretending to be another person. It is actually a misnomer to a lot of persons, since it is not implicitly plausible to steal someone’s identity and use it.
Various problems can occur to the person whose identity is being used; this comes when they are held responsible for the perpetrator’s activities under their identity.
This is becoming more and more of an issue in Real Estate transactions. Information gotten from wicked actions can be exploited and might leave your credibility damaged which might cost you more financial problems, not to mention, the legalities that surrounds it.
Image Source : barriehouseprice.com

Shame, shame!

editor — Tue, 22 Sep 2009 08:20:36 +0000

It is a shame for an Ex-Mayor’s to be tarnished with scandals—more so if the scandal is related to real estate fraud . New Jersey’s Ex-Mayor Sharpe James, together with his girlfriend Tamika Riley, were found guilty on all 5 counts: three counts of mail fraud (by selling low valued city lots to Riley), one count for obtaining funds from the state for the local government and one count of conspiracy in an effort to fool the public.

The flipping scheme allowed James to obtain low priced lands which he sold to his girlfriend for $46,000 (9 properties all in all). Riley then sold the properties for more than a total of $600,000.

Photo taken from http://blog.kir.com

FBI: “Let’s pin the mortgage scammers down.”

editor — Thu, 27 Aug 2009 08:49:41 +0000

The FBI indeed has changed its focus. They have been working hard to pin down real estate fraudsters and scammers, making this white collar crime as one of their top priorities. In 2003, a total of 215 case initiations were filed but come 2007, the data indicated that there were at least 490 cases filed against the fraudsters. The FBI is still keen in chasing behind scammers since the real estate economy is not doing well (due to the sub-prime issue). They have released in their recent press release that they are investigating a total of 1,300 real estate fraud cases (more or less) to date.

Photo taken from http://www.ersnews.com

Title Fraud

Patrick — Fri, 03 Jul 2009 16:14:18 +0000

This ploy involves career criminals who know how to reel in possible buyers without arousing suspicion, using fake land titles to hook them in. Document forgeries is the easiest way to call these documents that have the feel and look of the real thing but are really fakes under the skin.
Using originals to get more value from them or altered through some method they can be entirely fakes or modified to make them reflect a totally different property or at a different more than actual value amount. The unsuspecting buyer, agrees to make the down payment and may even pay the full amount to take advantage of the low proce, only to find out the document is a forgery, forgetting to get the land title verified for security’s sake.

Buy and Bail – New Scam on the Block

Patrick — Wed, 03 Jun 2009 16:02:29 +0000

People have been trying to find ever craftier ways to get over the recession with as little cost as possible. And in this case, real estates agents have begun to record some new ones on the block that are quickly adding to more problems in the already distressed world of reals estates, Buy and Bail. The scam has a homeowner signify to purchase a new home while letting their old home settle into foreclosure, using a lease with the lender to boost their income levels.
This results in a higher credit standing so they qualify for mortgages at both instances, bailing out of their old homes as they get the new one. The crafty ploy leaves the agent and lender both to lose investments as the homeowner leaves and takes their mortgage payments with them plus some extra cash they make form the bailout process.
Image Source :nuwireinvestor.com

Identity Theft – The Continuing Scourge

Patrick — Wed, 06 May 2009 04:14:53 +0000

Identity theft continues to wreak havoc on the economy and hardworking honest people who can simply do without it with all the problems we are facing today. Even an innocent looking e-mail can be used for phishing and include the information for financial stuff and you get vishing scams. All of the above mentioned activities designed to get your information for use in criminal activity that you would surely hate.
As stressed over and over again, under any circumstance, should you provide information to people you cannot be sure of their credentials. When using the internet, be sure you are on a legitimate page with the proper security in place such as an intrusion prevention system (internet security software), and that the page is over a secure server. With that in mind, you should also be aware of current threats and if you get any email regarding you and your online accounts saying there has been a problem and that you should complete an online form to send it and resolve the problem trash it for banks have long done away with such practice due to the risks involved. You have to log-into their secure servers and do your business, making sure to log-out in case you are using a public computer.