Your guide to real estate fraud

Mortgage Fraud

August 27th, 2014 Posted in Detection, News, Real Estate Fraud | Comments Off

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

Fraud on the rise with the hard times

August 20th, 2014 Posted in Information, News | Comments Off


With these hard times upon us all, more and more people are looking for ways to help boost their current financial situations. Often times it’s these people who fall pray to scammers looking to take advantage of the situation. It is important that you ignore or immediately delete any suspicious emails asking for personal information. Any legitimate financial institution what needs that kind of personal information will not just send you an email. Also, be wary of companies offering loans even for those with low credit ratings the modus operandi is to have people pay them a supposed processing fee, and once that fee is paid, then the customer doesn’t hear from the company again. It’s a sad fact that many people are taking advantage of the situation, but you need to always be alert and careful when dealing with your money.

What is Real Estate Fraud

July 3rd, 2013 Posted in Information | No Comments »


One of people’s major goal in life is to be able to buy their dream home. But what if you’ve saved so much money for so long only to find out that you lost your money from a real estate fraud? Real estate fraud is an illegal activity, it is a misrepresentation of information regarding real estate documents or mortgage loans.

There are different types of frauds when it comes to real estate, the most common ones are computer fraud (anything real estate related that is changed or stolen online), title fraud (stolen identity used to sell properties), foreclosure fraud (mortgage lender steals consumer’s home to sell to cover their own debt) These cases are all punishable by law. A person who is caught doing real estate fraud can be put into jail and charged a hefty fine. It is a serious crime and should not be taken lightly as it victimizes thousands of people every year.

 

Fighting Fraud

May 31st, 2013 Posted in Information | No Comments »

There are so many greedy, conniving people in this world that you always have to be careful so that you don’t get cheated. Specially when it comes to big investments. Some people can be very gullible and trust people easily that they end up in a tight spot. So, do not allow yourself to be a victim. There are ways to not be scammed, you just have to know what to do. Here are some things you need to think of before you give your full trust to a person.

  • Always work with a reputable real estate agency. Research for companies that have already been in the market for a long time and have good records
  • Work with a lawyer. Everything should be done in the most legal manner.
  • Read all of the contracts presented to you before signing anything. This is not something to be lazy about.
  • Avoid looking for real estate online.

Craigslist Scams

April 22nd, 2013 Posted in Information | No Comments »

 

Craigslist is probably notorious for scamming a lot of people, not the website itself but the people who actually post in it. The problem with this website is that there’s no way of screening which person is telling the truth or which ones are out to get you. If you are looking for a place to rent or buy, then this might not be the best place to look for one. Real estate scammers are abundant on Craigslist, in fact there are so many cases where people lose a lot of money trying to look for a house.

Like the case of the girl in Bridgeport looking to rent a house, she responded to a Craigslist ad where she coordinated with the supposed home owner. She then sent $1,400 through Moneygram and was expecting to get the key to the apartment in the mail. Of course, the key never came. Rental scams like this is very popular and happens everyday. So be extra careful when looking for a home. Make sure that you do not send money, pay in person when you are already holding the keys to the house, never before that.

How To Fight Fraud

March 24th, 2013 Posted in Information | No Comments »

There are different fraud and scams on real estate that are now prevalent throughout the world. The rate in fact is embarrassingly high and people are losing millions of dollars. Though there are numerous effort to stop this, there are still so many people getting scammed each day. Most fraud takes place in the mortgage application process. It can be done using fake identification, misrepresentation of facts, fabrication of important details such as employment history or credit reports. All of these are crimes and when caugh can be penalized or even imprisoned.

To fight fraud, one must be careful when dealing with real estate. If you are planning on purchasing, then a lot of research should be done prior. There are a lot of fake agents trying to scam people for money. Make sure that when talking to agents, you ask for all information regarding the company they are working for, and check for identification. You must also ask to talk to other people they have worked with. If for some reason, they can not provide the information you need; then move on. There are so many real estate agents out there and you will land the right one with patience and research.

 

Favela As Prime Real Estate

January 23rd, 2013 Posted in News | No Comments »

When people talk about Favela, it normally means rival gangs fighting turf wars in shanty towns of Brazil. Now, in what seems like  a complete 360, it’s now a piece of prime real estate for European investors! The Rio de Janeiro’s Favela has been off limits to other people due it’s notorious reputation of drug trafficking. This past few years though, it is in the process of having a major overhaul. The police has now taken control and the transformation has been amazing so far. Though the rental price has gone very high, it is still taken advantage of by wealthy buyers. Ever real estate companies are opening offices. It’s very easy to do this because this place is a real estate gold mine! It has breathtaking views and nowadays, it is also clearly one of the most fashionable neighborhood in Rio. It has been quite busy with people battling to get a property but it has removed all of the gangs that has tainted the image of this once favela.

Guilty

December 30th, 2012 Posted in News | No Comments »

 

In Las Vegas, a former real estate agent was found guilty for participation in a real estate fraud scheme. Linda Marie Knot who schemed people that netted more than $10 million was sentenced by Judge Kent J. Dawson to serve a total of 70 months in prison,  An additional 5 years of supervised release plus a $3.9 million forfeiture. The scheme was simple but very effective. It happened 6 years ago and it involved 13 new homes. Kot caused material misstatements to be placed on loan applications, so she can make large commissions. Kot had three other co-conspirators, Hugo Coutelin, Jeff Thomas and Michael Perry. They all plead guilty for scheming. Coutelin and Perry were each sentenced to 15 months in prison. Thomas was sentenced to the time he had already served.

This incident should serve as warning to people who are in the process/considering to buy real estate. Scams are done everyday without being noticed so take extra precaution.

 

Who Is Involved?

December 3rd, 2012 Posted in Real Estate | Comments Off

b2.jpgAlmost everyone in the home-buying process is engaged in fraud -the original buyer, the brokers, the appraisers, the title company workers, the straw buyers.

Appraisers – The best line of defense to combat real estate fraud.


Lenders
– Usually the injured party of real estate fraud cases.


“Straw Buyers”
– are loan candidates who perpetrators use to get hold of home loans, but who usually don’t intend to occupy the properties they’re buying.

Fraud Repellant

November 25th, 2012 Posted in Information | No Comments »

 

There are so many greedy, conniving people in this world that you always have to be extra careful so that you don’t get cheated. Specially when it comes to investments. Some people can be gullible and trustworthy and they end up in a tight spot. So, do not allow yourself to be a victim. Here are some things you need to think of before you give your full trust to a person.

Make sure that you know every single detail about the person and company you are dealing with. Do a lot of research! ASK EVERY QUESTION POSSIBLE. Do not be embarrassed to do this. Every customer has the right. Ask for an NBI clearance and General Information Sheet to check the credibility of the real estate company. Also, make sure you get your own lawyer in on it too. Everything has got to be written down and made legal.