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.
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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.

Source

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.
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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), (more…)

The federal government has released information saying that cases of fraud that have been reported to various law enforcement offices shows an increase of 26 percent. This alarms them for as the government prepares to release the bailout money that is part of the $700 billion bailout funds, their aim is to get the money to those who need it and out of the hands of these crooks. They have mobilized information campaigns on all forms of media from large print (posters and billboards), newspaper and even paid for movie-time showing of ads that aims to make people aware of such activities in hopes of steering them away from fraud. People are also given the numbers to call just in case they do get into such scams who promise to give them cash till their bailout funds come enough to make their mortgage payments.
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Image Source: www.cbc.ca
Nowadays, many people are fooled easily by the great promises that some real estates agents say. Here are some tips to avoid real estate fraud:

Always, always, always understand what you are signing and agreeing to, and, always seek assistance from a skilled real estate attorney. If you do not understand something you’re being asked to sign, ask for clarification and re- read the document again before signing.
Ask for and check referrals and references for real estate industry professionals. Check the licenses of the real estate professionals with state, county, or city regulatory agencies. Make sure that the people you’re dealing with are in good standing with the appropriate regulatory bodies.

Be suspicious of such low investment. If it sounds too good to be true, it probably is.
Be wary of strangers and unsolicited contracts, as well as high- pressure sales techniques and people who play to your emotions.

Extreme caution against this kind of people should be greatly measured.

A Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The high returns that a Ponzi scheme advertises (and pays) require an ever-increasing flow of money from investors in order to keep the scheme going.

The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.

The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi was not the first to invent such a scheme, but his operation took in so much money that it was the first to become known throughout the United States. Today’s schemes are often considerably more sophisticated than Ponzi’s, although the underlying formula is quite similar and the principle behind every Ponzi scheme is to exploit lapses in judgment arising from investor naïveté.

Definition of Real Estate in the Web According to Google

• A portion of the earth’s surface extending downward to the center to the earth and upward into space, including all things permanently …
  realestate.aol.com/glossary
• Land and anything permanently attached to the land whether by nature or by person.
  www.rileycountyks.gov/index.asp
• an identified parcel or tract of land, including improvements, if any.
  www.lucianoappraisals.com/gpage4.html
• Term for land and all fixtures to land, including buildings and other improvements.
  www.assignmentscanada.ca/definitions/realestateterms.html
• Land, including all inherent natural attributes and man-made improvements of a permanent nature placed thereon.
  www.buckeyereserve.com/glossary_of_terms.htm
• Land and anything permanently affixed to it, including buildings, fences and other items attached to the structure.
  www.metrolibertymortgage.com/commonterms.html
• One who is licensed by the state to carry on the business of dealing in real estate. A broker may receive a commission for his or her part in bringing together a buyer and seller, landlord and tenant, or parties to an exchange.
  www.titleguarantynm.com/glossary/glossary_b.asp
• Land and all physical property on, below or attached to the land. Houses, sewers, trees and fences are all real estate.
  www.ncbuy.com/credit/glossary.html
• A term which is used to describe land. Real property is transferred by a deed. All other property is known as personal property.
  www.national1credit.com/Commonly_Used_Legal_Terms1.html
• Land and its appurtenances (attachments such as buildings or other structures or improvements)
  woodmoorsite.com/glossary.html
• Includes real property, leasehold and business whether with or without premises, fixtures, stock in trade, good of chattels in connection with the operation of the business.
  www.ottawahomesandcondos.com/looking_buy_glossary.cfm
• This refers to the physical land and appurtenances, including structures affixed thereto. In some states, by statute, this term is synonymous with real property.
  www.charmeck.org/Departments/LUESA/Property+Assessment+and+Land+Records/Real+Estate/Real+Estate+Terminology.htm
• This is the land, appurtenances and all structures erected thereon. Usually used synonymously with real property.
  caruthersinc.com/glossary.php
• A piece of land and whatever physical property is on it.
  bank-street.co.uk/glossary.html
• land, improvements to the land (buildings), a mine or quarry, minerals, standing timber and any estate or interest in the previously mentioned property.
  www.appraisalrelief.org/en/cms/
• Commonly used to mean land and whatever is attached to land (such as houses, trees, fences and the like).
  svc013.wic009tp.server-web.com/social_justice/ntreport05/app1.html
• Homes, offices, or other land or buildings that you can invest in. An investor might choose to invest in a house if he thinks it is in a market where property values will rise in the near future.
  www.nfec.info/main/resources/glossary
• is land and any additions and improvements, such as buildings, sewers, sidewalks, and anything else considered to be permanently attached to the land. …
  thismatter.com/Money/Real-Estate/Tutorial/Realty.htm
• Land and those things erected or growing upon it, such as buildings, fences or crops. The term embraces items such as light, plumbing and heating fixtures when permanently attached.
  nesara.org/main/dictionary.htm
• Land including all the natural resources and permanent buildings on it. Specialized technician A person with the knowledge and skill needed to carry out a specific technical procedure.
  www.economicadventure.org/teachers/glossary_dec.cfm
• A section of land including all the natural resources (above and below the surface) and any permanent buildings or structures located on it. See also “Real Property.”
  www.canequity.com/mortgage-resources/
• This is the land itself and all things permanently attached to it.
  www.one-ifbyland.com/dictionary.htm
• Such gifts will be counted at fair market value as determined by a qualified third-party appraiser, subject to IRS rules and regulations.
  www.wvuf.wvnet.edu/Text/tdefinition.htm
• Land or land and improvements. Statutory law may broaden a definition of real property to include, for example, mineral rights or machinery permanently attached to a building. …
  www.co.gwinnett.ga.us/cgi-bin/gwincty/egov/ep/gcbrowse.do
• real property: property consisting of houses and land
  wordnet.princeton.edu/perl/webwn
• Real estate or immovable property is a legal term (in some jurisdictions) that encompasses land along with anything permanently affixed to the land, such as buildings. …
  en.wikipedia.org/wiki/Real estate

Because of the past year’s abundance of real estate market, mortgage fraud and other fake real estate related scams increased. The perpetrators of these range from brokers looking to make fast money to drug dealers laundering ill-gotten wealth.

Year by year, fraudulent scams victimize people and businesses from many walks of life, even struggling families lured into home loans which they cannot afford and honest real estate investors fleeced out of their investment money.

By federal tax fraud investigations and money laundering, the Internal Revenue Service plays a vital role in order to fight real estate fraud.

The FBI calls it the “latest scam on the block,” but for years now we’ve been warning people and reporting about scam artists who steal your identity and then your home. Now, after years of reporting and writing about this sinister act, the FBI is stepping up its efforts to make homeowners aware of the horrible connection between identity theft and real estate fraud.

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