What is affinity fraud? It’s a term in real estate where someone uses their position in a religious community to build faith with investors. This usually happens with devout members of an organized religion, that are active in their local community. Affinity fraud is especially devastating because of the level of trust and confidence the victims give to the scammers. Often times, people who are behind these scams are people who are looked up to or are viewed to have a high ethical and moral standing in the community. That’s why some victims, even after the scam has been revealed and their finances endangered, refuse to believe that they have been used. They may even refuse to prosecute the scammer, choosing to believe instead that the scammer will return their investments. Tragically, in most cases, the victims are regular wage-earners who have chosen to invest life-savings they can ill afford to lose.

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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.

Here are some common fraudulent scams that fraudsters are most prevalent doing for the past few months.

First is property flipping, it is when the buyer buys a part of property for a very small price and sells it for a much greater price. It might be legitimate but, if it comes with false conversations and statements to the lender, it definitely is not.

Another is two sets of settlement statements. One settlement statement is given to the seller showing the true selling value. Then, a second false statement is provided to the lender presenting a highly inflated selling value. The lender then gives a loan in change of the property value and after the loan ius finished, the proceeds often are split in half by the instigators.

Also are fraudulent qualification; real estate agents aid buyers who would not pass by fabricating their employment history or credit records.

Mortgage fraud is a kind of real estate fraud that most often affects and harms the financial institutions which lends money for property purchase. The most known form of this kind fraud involves the swindler getting a property then artificially augments property’s value via series of sales and resales between him and someone between them. This mortgage is then locked up on the property depending on the price that has been falsely increased.
On the other hand, title fraud most often affects individual homeowners. There are limited number of title fraud cases though. It involves a swindler using stolen identities or forged files to move the registered owner’s title to himself without his victim’s knowledge.

Real estate and mortgage scammers be very warned! The Missouri lawmakers have final identified mortgage fraud as “making false statements or failing to disclose material facts” on Thursday that created the specific crime of mortgage fraud. Anyone found guilty of mortgage fraud can have his or her licenses revoked. The bill also creates fines for real estate brokers, agents and appraisers. It also attempts to influence real estate appraisals through extortion or bribery.

The bill, which had already passed the Senate, was endorsed 141-5 by the House last Thursday and now goes to the governor.

This bill will protect the people from real estate scammers.

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Home or business owners will torch their dwellings or stage a burglary for insurance money, but disguise the crime as a racial, religious or other hate crime. They might spray-paint racial insults on the interior walls, for example. Initially, the crimes often generate outpourings of community support and sympathy for the apparent victims, with considerable news coverage.

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Most insurance agents are honest and ethical, but a growing number of agents are bilking their customers. Dishonest agents steal their customers’ premiums, but not buy the requested policies. They cover up the thefts by issuing fake policies or other evidence of coverage. Customers often discover the scam only when they make a claim and the insurer says there’s no coverage. Dishonest agents also will secretly slip unwanted coverage into a policy to boost their own commissions. They may also convince policyholders — especially seniors — to cash out their life policies and buy a new policy with no accumulated value.

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Drivers maneuver innocent motorists into low-speed crashes, often making it seem the motorists are at fault. In many cases, the con’s car is packed with so-called passengers who are part of the scam. The passengers claim they received painful (and fake) back and neck injuries that require expensive treatment from a chiropractor or physical therapist who’s part of the scam. The shady medical provider files thousands of dollars with the motorist’s insurance company for useless or even phantom treatment. Increasingly, the crashes never happen at all—the cash and ensuing treatment are fabricated. The largest concentrations of staged accidents are in urban areas. The high traffic volume makes large numbers of injury claims more plausible and recruits for the scams are more-easily available.

1. Organized gangs: Organized gangs involving recruiters, car “passengers,” doctors, medical clinics, lawyers are involved in many of the largest staged-accident crimes. The gangs lure motorists into crashes, crash their own cars into each other, or invent “paper” accidents that never happened in order to make large volumes of bogus injury claims. These rings are widespread in several areas of the US, and often involve immigrants as street-level operatives. Many states have passed laws and regulations targeting staged-accident rings, and some have formed taskforces, hired special prosecutors and deployed other resources to shutting down the rings.

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If you do not know anything and much about mortgage fraud, you should take a class or read some articles over the Internet. On the previous article here on All About Real Estate Fraud, I talked about taking classes and seminars about real estate fraud. Good thing, www.tampa-bay-real-estate.blogspot.com outlined some things on how you would spot a mortgage fraud.

1. Having a real estate license, it does not mean they know anything about real estate.
2. Anytime a buyer wants to get a mortgage for more than the asking price, be very suspicious.
3. If you don’t know much about mortgage fraud, take a class.

Source: Tampa Bay Real Estate
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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
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